Cardinal Health, Inc. (CAH) Earnings Call Transcript & Summary

Good morning. It's my privilege to welcome you Cardinal Health's 2025 Investor Day. I'm Matt Sims, I lead Investor Relations and then enterprise financial analysis and on behalf of the entire Cardinal Health team, thank you for tuning in. We have a packed agenda for you today. Jason will kick us off, highlighting our progress, momentum and continued evolution as a company. You'll hear proof points as to why we're so excited for the future, and deeper insights into our growth strategies from each of our operating segment leaders and additional members of management, including leaders you've never heard from before in this capacity. Aaron will bring it all together with our updated guidance, long-term targets and plans for capital deployment, knowing this group, you've already gone through his materials. Of course, we've reserved plenty of time for your questions today. It's going to be a great day. As always, I need to remind that we will be making forward-looking statements, which are subject to risks and uncertainties. For a description of these, please refer to our SEC filings or the slide at the beginning of our presentation. With that, let's get started with the video. [Presentation]

Okay. Good morning, everyone, and welcome back to the New York Stock Exchange as it has been precisely 2 years since our last Investor Day here. And at that time, I outlined a clear strategy based upon the proven residency of our business, and my confidence that we would both deliver on our commitments while also building the foundation for long-term growth. The bottom line is we did exactly what we said we would do. And yet, we still have significant opportunity in front of us, and we're really excited to share with you today how we're going to continue to evolve, to reach that full potential. Now a key component of our strategy is going to remain a strong core distribution business that will be the foundation that everything else is built. And yet, this will allow us to continue then to evolve into more complex yet rewarding products and services to create that value for our customers, for our patients and certainly, ultimately for ourselves as well. And that's what we're going to be focused on. We're going to create value for our customers and remain the most trusted partner by delivering on our clear and consistent strategy, continuing to execute with vigor through the relentless focus on simplification and the ruthless prioritization that you've seen us focus on with our core. And we'll do this to drive strong operating performance and momentum, and we'll do this all through a very talented and experienced leadership team. And you're going to get to know quite a few of them here today as well. Now our strategy has been quite clear and consistent with only one tweak over the last 2 years. Now what has not changed is the significant importance of our specialty -- our Pharma and Specialty Solutions segment. And that remains our largest business within the business. Specialty remains our highest growth priority. It is the largest, fastest-growing part of the industry. And so we're going to focus our organic and inorganic investments there. The tweak that I'm referencing is really just in relation to the other two priorities. You see other the growth businesses of nuclear at-Home and OptiFreight, they have earned the rightful place as a higher priority within this enterprise. They have benefited from the resegmentation that we completed 1.5 years ago, giving them greater access to additional investments, but they also benefit from being in the right secular trends benefiting from the secular trends in the industry and being the leader within that part of the industry. And GNPD, while it is a smaller part of the business, it is still an important part of this plan, having delivered significant operational performance improvements over the last 2 years, taking the business from losses of $150 million per year to solid profitability and cash flow today, and positioned well for additional long-term growth. We're proud of the success that we've had over the last couple of years, accelerating our momentum. And through that lens of simplification, we both streamlined the organization, as well as continued to restructure the segments over longer periods of time with an eye towards effectiveness, efficiency, but also the accountability and driving that back into the organization. And we have invested back into the business. We spend more in capital today than we ever have. In fact, this year, we'll spend more than 50% more, than what we were spending just 4 to 5 years ago and in areas of driving profitable growth. In addition, we're spending more in M&A, but in areas that are specifically aligned with our strategy and where we have a very clear right to win. Of course, we are balancing that with these opportunistic investments with our returning capital to shareholders, which has been significant at nearly $3 billion over the last 2 years. Now the CFO and me can't help tell the story without a few numbers from time to time. And while the purpose of this is to highlight the clear inflection and the progress that we made in our operating earnings and our EPS, I think it's also important to note that, even in some of our more challenging years, we still generated very significant cash flow. So while we will remain focused on driving revenue, gross margin, profit, OI, all that, all the way down to the P&L, we will be focused on driving cash flow and most importantly, ensuring that we deploy that responsibly. You're going to hear a lot more about capital deployment today and how we're thinking about that. Our progress has been widespread. Now these targets were aggressive, a clear inflection from where we were at the time, but yet we still steadily surpassed them. We weren't perfect. Perhaps that's a sign of a good target. And we saw some work to do with GNPD. However, the overall performance is clear as we exceeded our expectations for the Pharma Specialty segment, the other growth businesses, which then drove the overall enterprise expectations -- exceeding expectations for both earnings as well as cash flow. And our momentum is continuing. Really pleased, Bill announced today that we are raising our fiscal '25 EPS guidance yet again and providing fiscal '26 guidance for 13% growth at the midpoint for EPS and providing -- confirming our 12% to 14% long-term EPS growth for fiscal '26 to '28. We're confident in our ability to manage through the current regulatory environment. As our overall enterprise earnings growth is being driven by increases in our targets for both pharma, as well as the growth businesses, and in addition, we're raising our expectations as well for cash flow today, which is a really strong sign and indication of the strength and resiliency of our business. So this is a team that you'll be interacting with today. Aaron and I quite well. If I'm here, I'm always trying to figure out who the secret sauce is in an organization. And these five operating leaders at the five operating segments that you're going to be interacting with today is very much the answer to that question at Cardinal Health. In other organizations, sometimes you have a lot of turnover and maybe it's a little bit less clear of a question to answer. You don't have that problem here. You see of these 6 direct reports of mine plus the 3 functional leads that are here with us today as well, these 9 individuals have been with me on this journey for the past 3 years. Interestingly, the group that you see here that you'll be interacting with today, they've all been in role and myself included for 3 to 4 years. We weren't enrolled much before my appointment as CEO. And they've been with us this whole time, no turnover at the senior level of the organization. And this group also has 15 years of experience with Cardinal Health, so also quite experienced. So simply put, this is the team that has gotten us here, and this is the team that will be executing our strategy. It should also be comforting for you to know that, deeper into the organization, we have similar characteristics with our deep bench. So as you heard me say in the video, we are healthcare's crucial link. A bit of a cliche, but I'd like to say we're the backbone of the industry. We are at the beginning, the middle and the end of healthcare as we span the entire spectrum. Our breadth is unmatched. We do an array of things, no one else does, including certain upstream and downstream services. We're fortunate to be in healthcare. I have worked in other industries. I really like healthcare. The benefits that we see with the broad trends, secular trends in our industry are fantastic. The aging of America can be an issue in other parts of the world, other parts of the economy. In our business, it's a real lifeblood of the ongoing rising tie to volume for our industry. There's also the innovation. We create innovation we benefit from, but so does all those people around us, and we get to benefit from that as well. And we have positioned our business to be able to better take advantage of these secular trends, such as our investments in specialty and nuclear to facilitate the benefit from innovation, but also our investments in at-Home Solutions and the specialty physician MSOs, where we position the business to benefit from the shift in the side of care as more and more patients want to receive that care either in or near the home. Underpinning all of this, of course, is technology. We continue to invest significantly to drive operational efficiencies. But more and more importantly, it's really to drive the meeting of our customers and patients ever evolving needs. Our business and our industry are quite resilient. Beyond those trends I just referenced, we also benefit from a very diverse customer, as well as an ever-expanding suite of services. And in my opinion, there's nothing like a solid historical precedence of past adaptability, that gives me the confidence that we'll continue to navigate any potential changes given that unique value that we provide. And while we recognize the industry will continue to evolve, we feel confident in our essential role to safely, securely and efficiently deliver these critical products to our customers and ultimately to patients. We are aggressively managing the potential impacts of tariffs, which at the current moment, directly impact about 2% of the company's revenue, all within our branded portfolio in GMPD. And as you know, that segment of the business represents a grand total of 5% of the Enterprises segment profit. But what's most important for us, is what's most important for our customers and ultimately, patients and that is to work with policymakers to minimize any potential impacts that this may have on the industry. And while we still have a lot of work to do, I am comforted in that there is very good alignment amongst all these stakeholders to promote the access to affordable healthcare, while not sacrificing innovation. And I think there's, again, no better proof point than a few numbers to really back up some of these points. Like with resiliency, a couple of data points that come to mind for me is revenue and operating cash flow. They both can be volatile from time to time based upon certain influences, customer onboarding and offboarding and things like that with cash flow, it's more varied than revenue, because of just the day of the week dynamic pay our suppliers in certain days of the week. We received cash from certain customers on different days of the week. So you have some year-to-year variation. But when you step back and look at cash flow over a longer period of time, like this nearly 25-year period, you see it kind of resembles the growth rate of the overall business and the revenue. What you -- I think is most insightful about this is what you don't see. What you don't see is a clear correlation to changes in economic cycles, economic shocks or you don't see business model changes or adaptations that have happened over the years, or you don't even see a strong correlation to operating performance. It really shows the underlying resiliency of our cash flow and certainly a very clear upward trend over longer periods of time. So, I don't want to steal all the team's thunder as it relates to some -- the really interesting updates and announcements that we have today, but I do want to give you a summary of some of the highlights to just demonstrate and have for you all the key progress right upfront. And there's no better place to start than our core. We continue to place a high priority in driving value through the core of our business. And starting with the Pharma and Specialty Solutions segment, we continue to invest organically in this core. You know about the Consumer Health Logistics Center. We've talked about that over the years. We're at Point Now, we're finally going live. It is a great project, it will really give us the trifecta value that we are looking for. It will increase our capacity in our network. It will improve the service levels that benefit our customers. And it will also improve our level of efficiency and productivity. So truly a win-win between ourselves and our customers. What is new for today is that we're announcing a new state-of-the-art flagship forward distribution center with the latest in automation technology in a yet to be determined state, again, benefiting capacity, service level and efficiency. In addition to those brick-and-mortar types of investments, we're also continuing to invest significantly in our technology infrastructure, such as our new ordering platform, Vantas HQ. This one, again, is all about our customers, creating ease and efficiency for them in doing business with us. Now switching to specialty, which remains the key driver of a lot of our investments in future growth. We're excited to announce today, the formation of the specialty alliance. This is built on the legacy, the infrastructure and the team from GI Alliance. It will transform into the leading multi-specialty platform with unique capabilities today already, of course, with gastroenterology as well as urology with clear plans to expand into other therapeutic areas. In addition, we're announcing today the launch of specialty networks into oncology, as well as expanding our capabilities further in gastroenterology and rheumatology. This team with Specialty Networks has a long history of leadership within urology. So this is the natural next step in our expansion of our multispecialty strategy. And so to step back, these two announcements as it relates to driving those parts of our specialty business. Simply put, what we're trying to do here is bring together all of our specific investments, these and others to really drive our broad capabilities and to a more cohesive strategy to be the clear leader in the multi-specialty space. Finally, you're going to hear more about biopharma solutions today. There's a lot of great businesses that Craig is going to walk through with this business, but the one I want to stress upfront is our Synexis patient hub, always been a great business for us. We continue to invest in this business, driving its capabilities even further. We're at the point where our customers are really pulling for these services, driving up the demand, which gives us confidence we're going to more than double the number of products that we support in just the next 3 years. So let's move on to the other segment, the growth businesses of nuclear at-Home and OptiFreight. These three businesses are managed independently three independent leaders, three independent leadership teams, all reporting directly to me, no segment operating structure above the three individuals that you're going to meet today. They are the ones accountable for those three businesses. So let's go through some updates and highlights for each of these three. Within nuclear, you know the long history of this business and the investments we made over the years in Theranostics and other areas paying off very nicely for us. So we'll be investing an additional $150 million over the next 3 years to expand our pet cyclotron capacity in 11 key markets while continuing to invest in our center for Theranostics advancement out of Indianapolis to further support the strong pipeline that we continue to see in the theranostic space, especially in areas of oncology, urology and neurology. Moving on to at-Home Solutions. Certainly, we are most focused. Our highest priority without a doubt is the flawless combination of our business with advanced diabetes supply. These are two incredibly complementary businesses. And while still early, we're excited about the opportunities that we see to build those synergies together. In addition, from the organic perspective, there's also a lot of growth and opportunity with this business. You know the journey we've been on over the last 18 to 24 months, we've invested significantly in a refresh of our distribution's footprint, three new distribution centers, adding to our capacity and capability with fully automated capabilities in each one of these sites. We've been so impressed with the value that we're getting from these in areas like service, quality, safety, productivity. And by the way, the third one is just going live now as we speak. So we don't even have that one online. Those three have given us the confidence that we're going to continue to invest into this network with 3 additional sites over the next 3 years, bringing our total network to 6. More than 50% of the network will have this in the latest of automation technology by the end of this 3-year period. With OptiFreight, we're building on the historical success that we've had in acute medical with today's announcement that we are entering the acute pharma freight management business. This is a logical next step for this business, given our freight management expertise and leadership with OptiFreight and our clear pharmaceutical expertise within the pharma segment. This will reside in the OptiFreight segment operating segment, but the teams will benefit from each other's expertise. While the GPD improvement plan has served us well over the last 2 years, to inflect the performance from significant losses to modest profitability, we still have a lot of opportunity in front of us. And the tenets of the plan are continuing to work, so we're going to continue to drive those, driving Cardinal Health brand volume growth and the ongoing simplification and cost optimization opportunities. Now stepping back, a few comments about our portfolio. You know that this management team has been very focused on analyzing and adjusting our portfolio as necessary. And this will always be an ongoing process for us. Yes, this is a good summary of what this portfolio looks like today and the role of each of the businesses and how we play within that. Clearly, the Pharma and Specialty Solutions segment is our highest priority and will continue to be the focus of our organic and inorganic investments within this critical business. And increasingly, we see additional opportunities with the other growth businesses of nuclear, at home and OptiFreight. In fact, we're in the earlier phases of identifying additional growth opportunities between these 3 critical growth parts of our business that make up the other segment and the broader enterprise. While you're going to hear about some of these today, I really do see that a lot of what we're showing here and some of the thoughts that we're talking about at this moment is really about the growth beyond the next 3 years, to ensure that we have a continued tailwind to be able to go longer term with the growth trajectory that we've seen with these businesses. So just a few examples to try to bring this to life. Let's start with the left-hand side here, the nuclear business being a very unique critical business within this portfolio. They have very significant overlaps with the customers and patients that you see within the pharma segment there, whether it's the biopharma solutions business, perhaps at SynXis, perhaps specialty networks. We see a lot of that overlap, especially -- I'm sorry, and the MSOs, of course, with our specialty physician MSOs. You see a lot of overlaps with certain therapeutic areas such as oncology and urology. And we see -- the teams are already working together. You heard about today's announcement to expand especially networks into oncology, it all brings those types of opportunities together. Additionally, now shifting over to the right-hand side, you can see that we have, of course, our broad-based pharmacy expertise. When we think about the at-Home Solutions business, they have a fantastic omnichannel platform, wonderful customer and patient relationships especially in areas like urology and diabetes, interesting ways that we can work together there. And of course, we already gave one proof point of the opportunity to work with our pharma segment and our OptiFreight business with the launch and expansion of the OptiFreight business into the pharma space is a great example of where we can continue to bring together the best of the best of those organizations. But make no mistake, we also see a lot of opportunity over the next 3 years for the other growth businesses. You don't have to wait beyond 3 years to see the continued growth in this business. We -- you can see this through just some of these numbers. You can see that we anticipate more than doubling the earnings contribution from other over the next 3 years versus where they were over the last 2 years from 14% to 29%. Also notable here, I believe, is GMPD. And while it's still growing, it's expected to contribute a little bit less of a meaningful portion of this growth. We have benefited from the GNPD improvement plan over the last couple of years, driving 36% of the earnings over this period of time. However, that's expected to normalize over the next couple, 3 years. So to summarize, we are well positioned to continue to accelerate our momentum while evolving to reach our full potential. We do have a unique breadth of capabilities and a consistent track record of doing what we said we would do in a resilient industry that still has significant growth opportunities. We have made tremendous progress over the last couple of years. This is absolutely a credit to our dedicated team, our strategic focus, our relentless simplification and ruthless prioritization on our core to drive continuous improvement. We're proud of the 12% to 14% EPS long-term growth targets driven by both strong operational execution, but also the responsible deployment of capital. Now no doubt, a significant part of our success to date as well as our expectations for the future resides with the Pharma and Specialty Solutions segment, led by Debbie Weitzman. When I stepped into this role nearly 3 years ago, one of the first decisions I made -- it could very well have been -- my first big decision was to place Debbie as the CEO of this segment. And she and the team have absolutely crushed it. So now they're going to walk us through our strategy and plans to continue to drive this business well into the future. Thank you.

Thanks. Good morning. It's great to be here. I'm so happy to be able to share with you the amazing progress and the results of the Pharma and Specialty Solutions team. We have a great story to tell. So let's get to it. Our segment is comprised of 3 components that work together to add value to our customers and to our partners. Core distribution for traditional and specialty pharmaceuticals is the legacy business that you're all very familiar with. It really contributes a significant profit and cash flow for the enterprise. We have been upgrading, streamlining and simplifying this organization for the last 3 years to make it easier to do business with us, and we have seen that pay off over the last 18 months. I think the most satisfying part of this fiscal year has been the way our team planned for and then responded to a customer transition. To deliver the results that we have this year with that backdrop, is pretty remarkable and a testament to the hard work and collaboration of a very determined team in core distribution. Biopharma solutions and our new MSO platforms are collectively a robust set of services that meet the needs, both upstream and downstream of the many stakeholders involved in specialty. We made this our highest priority growth strategy, and we have curated investments both organically and inorganically to execute. Over the course of the next half hour or so, we will share details of how our specialty capabilities work together to drive growth in this fast-growing part of the industry. So let's quantify that growth trajectory. In 2024, specialty represented $400 billion at invoice price of the $769 billion market inclusive of both specialty distribution and specialty pharmacy channels. Specialty has grown at a 10% CAGR versus 8% for the total market over the last 5 years. But what I really like is that specialty is driving the double-digit growth of the market with innovation and personalized medicine, while traditional pharma is still growing nicely in the mid-single digits driven by market trends and demographics. With the backdrop of the market dynamics and the work we've done to evolve our portfolio, the segment strategy remains the same: strengthen our core and expand in specialty. So let's dive in to elaborate on our progress, starting with the core distribution business. When we talk about strengthening our core, our focus on the customer experience has been a differentiator for us. We've been busy this fiscal year. In our last earnings call, we confirmed that we have successfully onboarded new customers contributing $10 billion of new business in FY '25. This also gives us a tailwind in FY '26 as we have the benefit of a full year. Our teams focus on all aspects of the customer experience, from the courtship phase, through the onboarding and then the day-to-day details of managing that relationship. The collaboration between our commercial teams and our operating teams leads to a really great experience for customers. In core distribution, we increasingly see crossover between different pharmacy types. Our unified approach helps us support customers as they expand. For example, health systems often have retail pharmacies and some are even running mail order pharmacies. All independent pharmacies serve their communities with retail stores, but some also serve long-term care facilities or provide compounding services for things like dermatological creeps. We have a growing market strength in the grocery class of trade. These customers are so innovative and holistically caring for their customers' health needs from food to consumer products to medicines and more. We have historically been underrepresented in physician offices. Our entry into the MSO space is helping us get after that, and our MSO colleagues are helping us be a better distribution partner for physician offices. What I'd like you to take away from all of this is that we are very well positioned to follow the patient to whatever care setting they choose because we want to serve all customer types equally well. Let's talk about strategic sourcing for a minute, because it's a very key source of value to the business and a profit contributor for this segment. Our relationships with brand manufacturers are fundamentally important to us. And our partnership with CBS brings expertise and scale across a number of areas: generic pharmaceuticals through Red Oak Sourcing, biosimilars through Avaron and a private label over-the-counter products partnership through IQ purchasing. All three of these focus on product availability and cost to ensure we have the products our customers need at the best possible price point. Generic pharmaceuticals will remain an important source of profitable growth for this segment. We expect market volume to continue growing 2% to 3% per year. Small molecule patent expirations will have a higher impact over the coming 5 years compared to the previous 5 years. And we estimate $125 billion worth of loss of exclusivity impact over the 2025 to 2029 period. In June 2023, we announced plans for the Consumer Health Logistics Center to be built in Groveport, Ohio. This is not just another warehouse. It's a first of its kind consumer health and over-the-counter products hub. It's a new concept for consumer health, but it is very similar to the hub-and-spoke concept of our National Logistics Center for Pharmaceuticals, which we've been running for over 20 years. This hub allows us to buy at scale and centralize consumer health inventory, frees up capacity at our forward distribution centers, while improving service levels to customers. It will help us expand sales by meeting the needs of online and digital customers. CHLC deploys robotics and automation, which will help us improve efficiency and support employee safety. We are receiving inventory as we speak and will be fully operational next month. As a result of the market trends and core distribution growth, we finalized our multiyear plan for expanding and modernizing our distribution footprint. The CHLC was our first new building. Next, we're kicking off a new high-capacity fully automated forward distribution center, and we're currently evaluating different states to find the optimal location. We have also completed or we're working on several other significant investments that drive growth across core distribution. We are benefiting from the modernization of our core technology platforms by adding customer analytics and enabling the use of artificial intelligence. For example, the Cardinal Health Inventory management engine has helped us manage drug shortages proactively to drive better service levels for our customers, while also optimizing working capital. Another example, our analytics capabilities helped us assess our last mile transportation requirements and led to meaningful cost reduction and improved on-time service. And finally, we have been rolling out in waves, our new ordering platform, Vantus HQ. And by the end of this month, 10,000 accounts will have seamlessly migrated to Vantus HQ. These customers are enjoying many enhancements and a very intuitive user interface. And on the back end, we have enhanced capabilities to use analytics to optimize customer marketing. Now let's turn to our Specialty business, which has been our key enterprise strategic priority. In Specialty, we are now over $40 billion in revenue and have grown above market at 14% over the last 3 years. In FY '25, we were able to integrate 3 critical acquisitions. Specialty Networks provides an expanded solution set to both manufacturers and providers, integrated oncology network bolsters our Navista strategy to expand in community oncology and GI Alliance strengthens our position in autoimmune, which we define as gastroenterology, rheumatology and neurology. Our managed service organizations enable us to support independent physicians who will deliver great care in their local communities. We are excited to announce the specialty alliance, which builds on the fantastic GI Alliance platform that Dr. Weber and his team have built. Within the Specialty alliance, we are introducing the urology alliance, and we will expand into other multispecialty therapeutic areas as we move forward. In oncology, Navista has taken a differentiated approach by building a technology-enabled clinical tools with the input of physicians. For example, the Navista Practice Intelligence Suite is our proprietary tool that provides clinical and operational insights practices. Users can create and analyze patient cohorts as well as leverage clinical views to uncover insights around treatments, disease staging and more. And in December, we accelerated the growth and capabilities of Navista with the acquisition of Integrated Oncology Network. Our acquisitions have put us in a strong position to grow our impact across 3 related therapeutic areas. The autoimmune therapeutic areas include a large and growing pipeline of often related infusible drugs. They also give us expertise in diversified ancillary services, including ambulatory surgery and pathology. Oncology represents over 40% of the specialty distribution market and over half of the clinical pipeline. We've strengthened our position here in FY '25, and we'll continue to expand in multidisciplinary oncology. Urology is the bridge between the two. Urology practices share similar practice economics and ancillary businesses with autoimmune while the drug pipeline for urology is oncology-focused. Our focused therapeutic areas also represent significant and growing areas of drug spend. We expect to see high single-digit growth rates for these products. Oncologics for both oncology and urology as well as autoimmune products continue to benefit from robust product pipelines and ongoing efforts at innovation. However, drug spend is not our only focus with our MSO platforms. It's also important for you to understand that autoimmune and urology have a diverse set of revenue streams, which is different than medical oncology. There is a nice balance between revenue generated by office visits, procedures which are usually performed in ambulatory surgery centers and other ancillary services, which include pathology, anesthesiology, infusion and others. By contrast, medical oncology has a very different profile driven almost entirely by infusion revenue. So next, Dr. Jim Weber will take the stage to go deeper into the specialty alliance. But first, we have a short video that illustrates how our strategic focus has helped us build a platform that puts the specialty physician at the center of everything we are doing in specialty. [Presentation]

Good morning. My name is Jim Weber, I'm a gastroenterologist and the founder of the GI Alliance, which actually had its beginning in 1995 when I brought together 3 independent groups in the Dallas-Fort Worth area and expanded it to its current format in 2018 when we had our first financial partner. Over the years, the GI Alliance has developed into an integrated physician practice matching platform that supports numerous independent gastroenterology practices and their patients throughout the country. We are incredibly excited about our long-term strategic partnership with Cardinal Health, which now allows us to become, as you heard, the specialty alliance, working with their health care experts we can now provide even greater value to a wider range of physicians. Independent physicians within their local communities, as you heard, including gastroerologists, urologists, not only provide the best access to care for their patients, but they can do so at a very high quality and actually at a lower cost. There remains a significant number of these independent practice out there. They are not yet aligned with the physician practice management organization, or MSO, and many of these could really use the help of an organization like ours. By supporting these practices, these specialists within the community, the providers can then really concentrate on what is most important, being a doctor and taking care of their patients. Physicians own the responsibility of caring for their patients. But our managed service organization can actually provide a higher level of back-office support for the business that they are trying to operate, whether it's finance, RCM, HR, IT, security compliance. The MSO can also help them develop enhance ancillary services. such as anesthesia, pathology, radiology, infusion, pharmacy, research and chronic care management. Let's just take pathology as an example. With our help, we're able to provide a higher quality of service, more accurate results, quicker turnaround time, better reimbursement for the providers and actually at a lower cost for the patient and the payer. This provides an incredible value to the practices that we serve, and it's something that they did not have the capability to do on their own. GI Alliance has developed the experience and expertise to negotiate a very complex health care environment. And we can offer providers the resources and services that they can now utilize to really care for their patients in a much higher fashion. So Cardinal Health and GI Alliance have now created what I think is a powerful complementary partnership, which can further enhance our physicians' ability to practice at the very top of their license. Together, we are aligned in our culture and our vision and our mission to really be patient first, quality-centric and yet remain physician-led, allowing the physicians the autonomy within their practices to have governance in what we're doing and putting together while providing them capital to fund growth and complementary expertise to really enhance their practices. With Cardinal Health as our partner, GI Alliance now has the resources to support a broader range of independent specialty positions within a growing number of communities. As the Specialty alliance, we will build upon our proven track record and expand our support to additional community specialty providers, affording them the opportunity to provide the highest quality of care for their patients. Since our partnership with Cardinal Health, which was just this January, we've already brought in 4 independent groups in GI. We've also significantly begun our expansion into the urology space. We first partnered with Potomic Urology in Virginia and Maryland, and we recently closed our acquisition of the Urology America platform with offices in Austin, Denver, Lafayette and Memphis. To date, the Specialty Alliance has partnered with over 2,000 providers in 23 states. We have a robust pipeline of interested practices and we are growing rapidly in our mission to support a greater number of specialists and their patients. Next, I'm going to hand it over to Craig Cowman to discuss biopharma solutions. But before I do, I just wanted to use this as an example to talk about how we are working together to do some really exciting things. Our physicians, led by Paul Bergreen in the Specialty Alliance have been working collaboratively already with the specialty networks and PPS Analytics folks. And we've created a clinical dashboard on chronic medical positions such as Crohn's disease and inflammatory bowel disease. This tool now allows our providers immediate access to comprehensive data that previously was really unaccessible to the patients -- I mean to their physicians. This can now assist the physician in real time to make the best decisions for those patients. This is exciting, and I look forward to doing more with you, Craig and your team. Here you go. Thank you.

Great Well, thank you, Dr. Weber, and good morning, everyone. So I am proud this morning to provide insights into what we call biopharma solutions. I think the way we think about biopharma solutions is that we provide a holistic value proposition across the entire patient journey. Our solutions strengthen our provider network and their patients' access to the best specialty therapeutics and care. We size the market that we play in or that we compete in with our solutions at about $25 billion. But importantly, the outsourced solutions market continues to grow very rapidly, and Cardinal Health is playing an ever-increasing and critical role in these higher-margin solutions. What you see here on the slide are the various needs that manufacturers have to commercialize a product and then the solutions that Cardinal Health provides to support them. Our growth, our focus, our strategy will be to continue to drive scale in strengthening these core solutions. So I'll dive a little bit deeper into each one of them, and I'll start with Specialty Network Solutions, which we've added the word solutions to specialty networks because it's the integration of specialty networks with some legacy Cardinal businesses that were in similar spaces. So Specialty Network Solutions is an integrated multi-specialty organization focused on independent physician practices with emphasis on urology, rheumatology and gastroenterology. And as you heard earlier this morning, recently, we've expanded into oncology as well as supporting biopharma manufacturers. Specialty Networks creates value for customers in 3 key areas. So the first is economic value for independent specialty providers across 9 specialty GPOs. Secondly, clinical value through our proprietary technology platform, PPS Analytics, which as you saw in the video, and you've heard from Dr. Weber, is a tool that we use to capture data from practices and then transform that into useful insights and information for those practices to use. And then finally, that same data then is used to generate value as part of our real-world evidence network, which informs studies, which informs improved care. Next is our 3PL. So 3PL's growth has been driven by further expansion of technology and capacity capabilities. And capacity really in the area of cold chain and ultra cold chain at that to stay ahead of manufacturing needs and where the market is moving. The investments importantly that we've made here are driving a surging preference in the market for our 3PL services. And these couple of charts here are meant to illustrate the leadership that we have here. So last year, meaning calendar year 2024, the FDA approved 57 new drugs, biologics, cell and gene therapies, et cetera. So 57 new drugs. Of those 30 of those manufacturers are utilizing a 3PL, and our business supports 20 or roughly 63% of the products coming to market that use the 3PL. Moreover, the second chart is defined as 19 manufacturers were launching our first approved product and utilize the 3PL, and we support 15 of those are roughly 80% of those products. And then finally, we support a majority of the cell and gene products that have been launched to date and are proud to continue to serve as a leading partner in this space. So I think it's helpful to kind of understand the level of success and leadership we've had or leadership we've had leading to the success we've had in this business. The next area then is SynXis. So Synexis access and patient support gets life-changing therapies to patients in hours, not days or weeks. So when a physician writes a specialty drug, there are barriers that pop up that need to be dealt with. That's where we come in. Our job is to remove those barriers and get patients on therapy quickly and then keep them on therapy. We do it through a variety of means. We do it through therapeutic and clinical expertise, high-touch care, reimbursement support, financial assistance services, all designed to help support patients providers and biopharma manufacturers again across that entire patient journey. The number of therapies that the team will support, as was mentioned earlier, we expect to more than double through our fiscal year '28, which means that our message is resonating. We are gaining strong traction and growth. And maybe to further illustrate that point, in calendar year 2025, so this year that we're operating in, Synexis will be launching 40 products from 7 manufacturers with more in the pipeline and strong consistent growth throughout our fiscal year '28. I think it's helpful also to underscore that our growth here in Synexis is being driven organically, and it's being driven organically through product innovation. And I would also say that with the level of growth that we are seeing here, it's always important to be sure that your infrastructure is matching your growth. And that is exactly what the team is accomplishing and continuing to deliver an excellent provider and patient experience. Then we have advanced therapy solutions. So this is where our tailored solutions and dedication to continuous innovation, uniquely empower us to help biopharma pioneers bring emerging therapies such as cell and gene therapy products to market. We do that by bringing together all of our biopharma solutions and the things that I'm talking about here this morning for cell and gene therapies to help navigate the pitfalls, optimize road maps and ensure that therapy gets in the hands for patients when they need them. So advanced therapies, as many of you know, including cell and gene therapies are often very high cost onetime treatments ranging anywhere from $0.5 million to $4 million per patient per dose. And the number of these therapies, which you can see on this chart here is expected to continue growing rapidly as manufacturers invest in these game-changing treatments. But with that comes some challenges and complexity to bring them to market. I would say Advanced Therapy solutions is an evolving contribution to Cardinal's bottom line at this point. I think it's largely driven by our 3PL. And maybe to put a finer point on that, to give you some perspective, since the first CAR-T therapy launched in 2017, our 3PL has handled over 20,000 orders representing $10 billion in sales in cell and gene therapy. So what does that mean? Well, the exponential growth in this area represents opportunities for Cardinal in a couple of different ways. One, continuing to grow our leadership within our current footprint and secondly, capitalizing on opportunities to expand our service offerings to meet the evolving needs of this market. So a couple of examples. CAR T network expansion into community oncology through Navista. Another one would be -- there's an increasing need for tailored provider engagement with real-world evidence studies and health economic outcomes research reporting that we use specialty network solutions tools to accomplish. And then finally, we -- a unified ordering platform that we have already created that we call Advanced Therapy Connect, which is a first-to-market tool that enables providers within treatment centers to order all available in-network cell and gene therapy products within a single portal, reducing manual errors, simplifying the process and optimizing access to cell and gene drugs. So I'll wrap by saying that biopharma solutions has continued to be a strong performer, and we expect to see 20% revenue growth annually through our fiscal year '28, through a combination of each of the businesses and solutions that I've talked about here this morning, fueling that steep growth curve. So for perspective, we've added some numbers to this slide to help lend some context here. We expect to close fiscal year '25 here in a couple of weeks with roughly $550 million of revenue and are forecasting to be nearly $1 billion in revenue by the end of our fiscal year '28 with these higher margin, high-impact solutions to create benefit for providers and patients alike. So with that, I will turn back to Debbie.

Thanks, Craig, and thanks, Dr. Weber for those great insights into those parts of our business. So let's wrap up this section. Two years ago, we had a clearly articulated strategy. Our organic and our inorganic investments helped us reshape the Pharma segment. By delivering on our core value proposition and distribution, we earn the right to invest and execute our growth strategy in specialty. As a result, we have great momentum in both our core and specialty. We are confident we will deliver 7% to 9% segment profit growth over the next 3 years. We are excited about our progress, and we're just getting started. Thank you. And now please welcome Jason, back to kick off the next section.

All right. Fantastic. Thank you, pharma and specialty team. Dr. Weber, I wonder if you're the first gastroenterologist to present at Freedom Hall. That's a data point I would love to know the answer to, but nice job everyone. I appreciate those updates. . So the fact that I'm giving the transition to the other growth businesses is again reflective of there is no other segment that exists. There is no structure. There's no leader. That was a really important part of the resegmentation that we completed 1.5 years ago. And I just wanted to spend a couple of moments, one slide to walk through what we did with the resegmentation, why we did it and what we were looking to accomplish with that. So to tell the whole story, I really need to go back to when I arrived at Cardinal about 5 years ago, CFO role at the time, I was always intrigued by these businesses. They each were solving very complex challenges for our customers. And they were in very fast-growing parts of the industry benefiting from those secular trends that I referenced in the opening. But what was also clear, as I spent more and more time with them is how much they were the leaders within the respective part of the industry and how much underlying potential there was. At the same time, I was also seeing day to day how their operating characteristics and their investment requirements were entirely different than the larger segments that they were part of. We had 2 segments of that time, and so that was very much the catalyst to breaking it apart into the 5 different operating segments, of which 3 are the reportable segments. So when I stepped in as CEO then, nearly 3 years ago, and we were using the business review committee process and analyzing the portfolio and determining what should stay, what should go and how we should structure it, we concluded quite clearly that indeed, there are significant synergies and growth opportunities between these 3 growth businesses and the rest of the enterprise. And then as a result, we concluded and made the announcement on 2 different occasions, 2 different announcements. But with the entirety of these 3 businesses, each announcement use the same words. We are going to retain and grow these businesses. You probably just glossed over those words at the time, they were actually not even intended for investors. They were intended as a key message to our team. We're going to retain you, but we're going to grow you. This was not about moving around the chess pieces and getting you guys all confused in making you redo your models. This was all about driving accountability deeper into the organization. And this retain and grow concept, give you a little bit of inside baseball as to how I actually took this to manage the team, the night before each of those announcements I pulled aside each of these 3 leadership teams, the presidents of each of these businesses, you're going to meet with now and their staff. And I told them, okay, we worked with the Board, went through this process. We are going to retain and grow you. Now let's talk about what this means. This is not just putting you over here. We're going to grow, how are we going to do that differently? I didn't tell them what we're going to do. What I did say is, hey, this is an opportunity for you. Think about what if we would have made a different decision instead of being retained, what if you're now working with PE, what would you do differently? How would you approach tomorrow in that context? What types of decisions would you make? How would you think about organic investments? Would you consider inorganic investments. They were buried so deep before, it would have been very difficult to do something like that. So since then, that's been our focus, retain and grow, stop talking about the retained part, just grow, grow, grow. And we've done that both organically and for the first time in many years inorganically within that Home Solutions business, which we're going to turn to next. As you can see, we made a lot of progress over the last few years here as well, now over $5 billion as a collective reportable segment, 10% margins nearly and growing at double digits. So now I'll turn it over to Rob. Rob Slisberg, who will lay out the strategy and plans for the at-Home solutions business and share with us how they're going to continue to drive that momentum into the future.

All right. Thanks, Jason, and thanks for the opportunity to talk about at-Home Solutions. I started at Cardinal Health about 19 years ago, first in pharma. I spent time in the Medical segment. And this is my second stint within at-Home Solutions. And I can honestly say, no offense to my colleagues, I got the best job here. There is no place that I'd rather be. We infuse this mindset into our culture every single day. When you look at the critical role of Cardinal Health, I believe there's no simpler example of being health care's crucial link than within at-Home solutions. So over the next 10 to 15 minutes or so, I'll talk about our business, and more importantly, our opportunities for growth. But let me start with 3 things to set the stage. First, what we do is simple. It's not easy, but it's simple. We give people the critical medical supplies they need to live their lives uninterrupted. Second, we have a long runway for success. We are scaled and have a strong foundation to build out. And lastly, we're committed to being a trusted partner in long-term chronic care management. No one chooses to have a chronic condition. We strive to make their lives better. Now, we do this by being both a direct-to-home distributor and a direct provider. First, we have Cardinal Health at-Home, our leading wholesale distributor of home medical supplies. The B2B side of our business. We work with home medical equipment providers, home health and hospice agencies and other entities that provide medical supplies to patients in their homes. When someone needs care in their home, we make sure the supplies they need are there when they need them. But we're in the background. We're invisible. We're an extension of our customers, of their business. And then we have our scaled provider side, the B2C business. We're combining the recently acquired advanced diabetes supply with our Edge Park business, to create one of the most powerful platforms in the industry to serve patients with chronic conditions. ADS focuses solely on diabetes with an exceptional customer experience and strength in government payers. Edgepark has expertise across categories, including diabetes and extensive commercial access. We now have access to nearly 90% of all covered lives in the United States. And through these businesses, we reached more than 6 million patients and over 22 million shipments annually. Let's talk a little bit about the industry we compete in. We focus on a segment of the HME industry, home medical equipment. That's about a $45 billion addressable market. Now you may hear me say HME or DME and think we provide wheelchairs or beds. We're very intentional about where we focus and just as importantly where we don't. We want to ship small supplies in small boxes at a rapid rate and do so as cost efficiently as possible. We want to focus on the medical supplies that patients need over and over again. That's our core. Now we have scale in many categories. For example, urology is the largest in the distribution side of our business. But diabetes is a big focus on both businesses. Diabetes is one of the fastest-growing and costliest conditions in the U.S. Within diabetes, CGM has become the standard of care and utilization continues to grow. Even with broader access, nearly 65% of all eligible people with diabetes are not utilizing CGM. This opportunity is key for us. It is a large and growing segment and we are the industry leader. We've grown revenue double digits consistently weighted more to the distribution side versus the provider side. But that's where ADS accelerates our strategy with a long track record as the leader in a growing diabetes industry. Adding ADS' diversified patient acquisition engine driven by a relentless commitment to growth, unique partnerships and specialized sales and marketing capabilities, we will further accelerate our growth. We're proud of what we've accomplished but even more excited about what's ahead. Now to support this growth and achieve our targets, we must continue to build our supply chain for the future. We've made significant investments to improve customer experience, drive productivity and create capacity to support that growth. robotics, automation, AI smart management systems, these investments are foundational to our strategy. I'll talk more in depth about that in a moment. But know that our foundation is solid. We are accelerating. So I talked about our dual strategy to win and create value as both a scaled distributor and a direct provider. This is unique in our industry. We are solely focused on this segment of health care, dedicated distribution and with dedicated customer service and commercial organizations. Everything we do is designed to ensure the millions of patients we reach get the medical supplies they need, and we do this through both sides of our business. Being a leading distributor helps us create scale and efficiently reach the entire country and have a broad product portfolio across numerous categories. As a leading direct provider, we have expertise in specific categories and extensive knowledge of the payer landscape. ADS reinforces these strengths and further balances our approach, an approach that we have successfully balanced for many years. We will continue to build on our core strength and invest in our supply chain. We will continue to accelerate growth in categories across conditions, including diabetes. Our strategy is clear. We are committed to executing it. Okay. So when we talk about our strategy, it starts with our supply chain. That's our foundation. We have over 2 million square feet of dedicated distribution space across 11 sites. And we're excited to announce that we have 2 more new sites planned, but we aren't just adding DCs. We're adding them in the right locations with automation, to increase our throughput and capacity. In just the last 3 years, we've opened new sites in Ohio, South Carolina, and most recently in Texas. Next, we will add capacity out West and in the Northeast, as well as retrofitting certain legacy sites with the new automation. By FY '28, we will more than double revenue per square foot by creating more effective space and driving the optimal product mix. And our investments are paying off. We are operating at levels as good as we have on record across service, productivity, safety. Our dedicated distribution network is truly a differentiator. Now when I say dedicated, what I mean is our sites only service at-Home Solutions and our customers, meaning we can design our systems and processes to specialize in direct-to-home distribution. And customers are thrilled with the service we deliver in the metrics that matter most of them. We take our mission seriously. If we have a bad day, a patient on the other end has an even worse one. There is no room for error. The best supply chain is a requirement, not a nice to have. Now when you have the capabilities we do, we're able to capitalize on opportunities like the one we see today in diabetes. The number of Americans living with diabetes growing that total pie is getting bigger. We've seen CGM access expand. We expect it to continue that. CGM pie is getting bigger. And there's still an opportunity in the existing population to close the gap for those eligible and not using CGM. So what's important to note is that within this 65% gap, there's estimated to be more than 4 million people living with diabetes on insulin, eligible through their insurance that are not using CGM today. ADS, with its unique and diversified approach to patient acquisition is an accelerator to tap into this opportunity. We see significant synergy opportunities driven by the complementary nature of our businesses. Okay. Let me just anchor back where we started. Two businesses. Both have the same mission. Get people to medical supplies they need when they need them and as often as they need them. But we also have an opportunity to build on top of that already strong foundation. We believe in an omnichannel experience, something that's only enhanced through the ADS acquisition. We have expertise and scale to navigate payment models, pharmacy and medical benefit as well as cash pay. We can do this on behalf of our customers. So they feel that complexity that we know exists. All they see is a box on their doorstep. We take care of the rest. And then with our strong foundation, we have the opportunity to expand into new categories and new revenue streams. Today, we are particularly interested in category expansions and services that live in and around diabetes. And there's also potential to partner across Cardinal Health, the more comprehensively support customers and patients. Okay. To wrap up, we are the industry leader. We have a clear strategy, and we are committed to executing it. We are confident that our approach is going to take us to new heights. Our intention is to grow from the 6 million patients we serve today to more than 10 million annually in the next 5 years. And when I say in 10 million, to go from that 6 million to over 10 million. It's not just an aspiration. Our differentiated strategy unwavering commitment to growth, make this an achievable target. Every one of those patients at the other end of an order, a shipment conversation. We care deeply about them as health care crucial link. At the end of the day, we are a critical part of their care team. We take this mission seriously. Thank you for the time. It is my pleasure to introduce my good friend, Emily Gala.

Hello, everyone. Good morning. I am thrilled to be here to be able to share with you more about OptiFreight Logistics. What we do, why it matters and why we are well positioned for double-digit growth for years to come. Now Rob, I will respectfully disagree with you. I think OptiFreight is the place to be. With CARDINAL, this year marks 10 years for me at Cardinal Health. In enterprise marketing strategy roles, leading a number of our medical product businesses. And now for the last 3 years, I have had the absolute joy of accelerating growth for OptiFreight. So what do we do? OptiFreight is a leader in health care logistics management. We're trusted by our health care provider customers across the care continuum. We support hospitals, surgery centers, labs and pharmacies. It's helpful to orient you to what OptiFreight does by talking about the different yet complementary ways we help our customers compared to the traditional distribution services from Cardinal. At OptiFreight, we focus on direct shipments. Those shipments sent from manufacturers directly to our health care provider customers and those packages are health care provider customers send out from their sites to other sites of care to employees to patients. Based on our deep knowledge, proprietary technology, competitive rates and our distinct connections across carriers, manufacturers, GPOs. We help our customers confidently make ordering, receiving and shipping decisions that are cost effective and drive performance. With more and more customers choosing us, we now manage 23 million packages a year across 26,000 health care site locations. And we're trusted by the leading institutions. In fact, we support 7 of the top 10 health care supply chains as ranked by Gartner. All of that means that on an annual basis, our customers save $1 billion. Let's look at how we do that. We have a leading program focused on parcel and freight management that helps someone like James. I'm going to ask you to put yourself in the shoes of James. James is a VP of Supply Chain for a large health system. He's having to manage an increasingly fragmented system with hospitals in different states, sites across the care continuum. His team is constantly being asked to take on more and more departments to manage, often with very few, if any, incremental heads. And turnover is a way of life for James. He wants to be proactive, finding ways to cut out costs to drive performance, but he's struggling to understand what good looks like, especially in the area of direct shipments. OptiFreight comes in and helps James in all of these ways and more. We do so through a leading program with competitive rates that drives realized value for James week after week, year after year. Think about helping James understand how to optimally send a package, right, making sure that package will get to where it needs to be to drive patient care, but avoiding some of the unnecessary costs that go along with it. We also help James in operational efficiency. We help them get ahead of delays before they become an issue. We help them understand where to make sure patient care can be at its best. And lastly, we are so committed with the combination of technology and people, we act as an extension of James' team really powering up his productivity. As you can see, we have a network of over 7,000 participating manufacturers. We make it easy for James based on our auditing capabilities and invoice consolidation. And importantly, we provide decision-driving technology. I'm going to drill into this a little bit more. I want to introduce the concept of a TotalView Insights platform. This is something that we have invested in for years. We have built a robust platform, and we continue to invest in this area. If you think about James again, at any given moment, he could wonder where to deploy his team. Where is he going to uncover savings? Where is it going to drive performance? TotalView Insights helps them be successful. We provide reporting capabilities intuitive, easy-to-use ways to get answers to performance KPIs. Our tracking capability helps him understand weather preparedness or the needs to deliver a life-saving medicine, how to make sure it will absolutely get where it needs to be. And I'd like to describe the analytics capabilities as answers to the test. In the example that you see on the screen, we as a leader in the space, use our nationwide proprietary data set, combined with AI and machine learning to give James the answers. We drill in right away. And in this example, it shows cost per package by the departments in James' health system compared to like health systems, whether that's size, geography, a host of other factors that we could compare. James knows right away where is there opportunity? Where can he move the needle take cost out and make sure his team is performing at its best. We're not slowing down in the investments here. And what I love is that it's designed alongside our customers, constantly understanding what do they need today and importantly, where are they headed in the future. All of this has allowed us to outpace the market. We have grown 15% top line for the last 3 years, and we are at or above each of the segments of the market. Inbounds, those packages sent from manufacturers into our health care provider customers is growing at low single digits. That's aligned with general demand for medical supplies. We are outpacing that based on our ability to win new customers and importantly, expand the ways that we support our current customers. The outbound market is growing even faster, double digits. Clinical departments, pharmacies labs are driving that growth. And we are matching that growth. We will be even more strongly positioned with the innovations and the investments that we have, as Jason mentioned, we are very much focused in the near term in expanding the ways we support hospital pharmacies. Their needs are evolving, and they want us to be alongside them. So if we think about what's ahead for us, our growth priorities, it's simple. When and expand. We are doing this today, and we are not slowing down. I want to underscore that our customers don't just do business with us. They want to do business with us, then they want to do more business with us. It's a virtuous cycle and how we bring value to them. So the more our teams are relentless about finding packages and ways to bring into our program. It delivers value to our patients. That's a great position to be in. We're also investing, right? Innovating is the second priority that we have. And we have some exciting new capabilities that we're going to be bringing forth in the near term, focused on pharmacy, but those capabilities are very relevant for other frontiers of growth, especially in the nonacute space. So we're excited to continue to unlock growth we know in validated high-growth areas, ultimately delivering predictive, integrated frictionless customer experience. Let's bring it all together. We have a proven winning strategy led by an amazing team that I'm very proud of. We are investing in the right areas. We have a robust growth road map and the right support and the right investment to get us there. All of this is making us very confident that we will continue to deliver double-digit growth for years to come. Thank you for the time today. What I'd like to do now, we're going to transition to a video to introduce our Nuclear and Precision Health Solutions business, led by the very talented Mike Pentech. Thank you. [Presentation]

Well, you saw from the video we are at the center of the future of nuclear medicine and precision healthcare. We're not just helping the future of nuclear medicine and precision health care evolve. We're defining it. We're not merely participating in this industry. We're directly involved in driving it forward. Good morning, everyone. My name is Mike Pintec. I've spent my entire career in health care, spanning consumer health care to diagnostics and life sciences and now just over 10 years in Pharmaceuticals with Cardinal Health Nuclear and Precision Health solutions. And I'm proud to be here today to share with you how we're leading the charge in transforming health care, shaping and defining the future and realizing unparalleled growth. When it comes to growth in leadership, we had the vision early, leaned in, and now we're realizing the benefits with confidence in our sustainable winning strategy. Today, we're going to take a closer look at how cutting-edge science translates into real-world impact with our industry-leading capabilities from drug development to commercialization. Now before we go deeper, it's important to understand how a radiopharmaceutical differs from a traditional pharmaceutical drug. And in short, there are 3 key differences highlighting the complex nuclear medicine environment. The first being shelf life, a radiopharmaceutical decays constantly. Think of it like a melting ice cube. We typically have hours to days to get to the patient for administration once a dose is prepared and for delivery. So we truly do operate in a just-in-time environment. Secondly, the regulatory landscape is more complex. And finally, there's also specialized requirements for patient administration with the radiopharmaceutical drug. For example, you need specialized physician and staff training requirements to administer. You also need to have an authorized user on-site to administer a radiopharmaceutical drug. And a radioactive materials license is required for the site where the radiopharmaceutical drug is being administered to the patient. Today's radiopharmaceuticals are part of a unique class of drugs known as Theranostics, which are novel diagnostic and realign and therapeutic combinations tailored to the individual patient. New radioligand therapies are different from radiation therapies of old in that they precisely target the tumor and deliver a small amount of radiation directly to the point of disease without affecting healthy tissue. We have the most comprehensive offerings in the industry for our customers. Our core business is healthy. And in patent theranostics, we have the latest products and are experiencing continued strong double-digit growth driven by our advantaged position as the industry leader. Cardinal Health is a highly differentiated leader in nuclear medicine, and we're shaping the future of precision health care. When you think about it, nuclear medicine is the embodiment of precision health care in that we prepare, dispense and deliver more than 12 million time-critical patient-specific doses annually in the U.S. Our differentiation is highlighted by our best-in-class service levels that result in greater than 99.8% on-time dose delivery, and that has to occur within a 15-minute window of time. We also have accuracy rates exceeding Six Sigma levels, and our commercial execution is second to none. We continue to invest in developing proprietary innovative technology solutions that drive efficiencies, enhance regulatory compliance and improve patient safety. And we have the largest, most comprehensive network of nuclear pharmacies and pet manufacturing facilities giving us the ability to truly service customers on a national basis. In fact, we can reach all -- our nuclear pharmacy network reaches all populated ZIP codes within 12 -- 24 hours. And we reached 95% of all U.S. medical centers within -- with 95 -- sorry, we reached 95% of all U.S. medical centers in the U.S. within 3 hours time. This is all underscored by our industry-leading expertise and deep experience that drive efficiencies, enhance that make us an attractive partner for any supplier looking to bring their products to the market. And as we look to the future and the introduction of novel Theranostics, pharmaceutical companies choose us as their partner of choice. Why? Because we just don't offer contract development or contract manufacturing capabilities. We offer complete end-to-end services that cover everything from drug development to commercialization. And our track record for success and demonstrated commitment to quality and service has earned us best-in-class customer loyalty. In fact, our most recent customer survey confirms that our customers see us as highly differentiated, adaptable to their needs and easy to business with and most importantly, a brand they trust. Nuclear medicine is in the early innings of growth driven by factors such as the aging population and related incidents -- increased incidence of disease, along with radiopharmaceuticals demonstrating superior imaging and improved therapeutic profiles compared to traditional treatment. Radiopharmaceuticals are not just a promise for the future. they are changing the landscape of medicine today. Diagnosing and treating life-threatening diseases like cancer, cardiac disorders and neurological conditions such as Alzheimer's, and we're well positioned to capitalize on emerging opportunities with a clear path to double-digit growth ahead of industry projections. In fact, looking to the future, there is potential for the market growth to accelerate in this sector. Radioligand therapies have the potential to continue to move up in the regimen of treatment for patients ahead of chemotherapy. Additionally, there's greater potential for radioligand therapies to be utilized more broadly in combination with other therapies like hormone therapies to combat disease. This is all attracting major investment from leading pharmaceutical companies, including AstraZeneca, Bear, Bristol-Myers Squibb, Eli Lilly, Novartis and others. In just the last 18 months, over $10 billion has been invested in this sector globally, driving the development of new, more effective and safer treatments, predominantly in oncology and urology. Pharmaceutical companies have recognized what we've always known, and we are ahead of the curve and ready to meet this growth. We prepared for this moment and we are positioned for success. And these major industry investments bring meaningful growth opportunities. Fernox is the next frontier in precision medicine and we're in a strong and sustainable growth trajectory, driven by our early vision and strategic investments. We saw the potential early on. In 2014, we launched our partnership with Bayer to manufacturers. [indiscernible] And just last year, in collaboration with the Bill Gates founded company, Terra Power, we became the first to supply commercial at Actinium-225 at scale globally. We are facilitating the acceleration of therapeutic innovation and the Actinium-225 isotope is a game changer. Actinium-225 therapies used high alpha -- high-energy alpha particles to target and more effectively destroy cancer cells. For years, progress was limited by supply constraints, but we broke through with commercial at Actinium-22 at scale, facilitating the acceleration of drug development and clinical trials that will lead to the next generation of therapies for patients. We're also expanding our pet manufacturing capabilities, strengthening our infrastructure to support future growth as a significant group of the radioligand therapies in the pipeline require a pet diagnostic. Our differentiation and unparalleled capabilities in Theranostics begin with our center for Theranostics advancement in Indianapolis. The Center for Theranostics advancement provides pharmaceutical companies a differentiated and seamless end-to-end solution to accelerate drug development and bring novel radiopharmaceuticals to market faster with less risk. The center encompasses state-of-the-art secure facilities that include lab space, manufacturing space that can be custom-built for various kinds of radiopharmaceutical manufacturing and central pharmacy operations for dose preparation and delivery to patients in the U.S. through our nationwide network of nuclear pharmacies. And we also distribute outside of the U.S. to countries internationally. So what does this all mean? This is accelerating the development, clinical trials and ultimately commercialization of radioligand therapies across a wide spectrum of oncologic diseases that will transform cancer treatment for patients. It will also be while we deepen our relationships with the leading pharmaceutical companies in this sector. Furthermore, we're seeing increasing demand. Today, there are more than 70 Theranostics projects we are supporting in our pipeline and the demand for the Center for Theranostics advancement is growing. Recent product launches across a spectrum of diseases like oncology, urology and neurology with Alzheimer's, will fuel our growth through 2028. And we expect more than 10 additional products in the pipeline to commercialize between 2029 and 2031. And each wave of new radiopharmaceutical drug launches will set the stage for continued growth across future horizons. Over the next 3 years, we are committing over $150 million to advance our differentiated position as the leader in this area, and we're just getting started, expecting Theranostics and pet combined to make up 65% of our revenue mix by 2028. We're confident in our outlook as pharmaceutical companies around the world are looking to us to commercialize and have commercialization success of their portfolios. We are central to the future of Nuclear and Precision Health care and have full confidence in our ability to realize strong sustainable above industry growth. And now you see why? We've transformed ourselves into a complete end-to-end innovation leader in nuclear medicine with the most comprehensive radiopharmaceutical portfolio in the industry. And moving forward, we're uniquely positioned to support Cardinal Health's specialty strategy. For us, this isn't simply about winning. It's about defining the future and leading it. Thank you. We'll now take a brief break, and then we'll return with my colleague, Steve Mason, who leads our Global Medical Products and Distribution segment. [Break]

All right. Well, I get to bring everyone back after break here. Welcome back from break. Bringing energy back after break. All right. Well, good morning, everybody. It is great to be with you today. I'm going to say something here to open up. My colleagues shared some really exciting updates. And if I was a betting person, what I know you're most excited to hear from me would start with the letter T, perhaps tariffs, I promise that I will get to that. But before I do, we're going to talk about what GMPD does, how we do it, and why it matters to our customers and health care systems more than ever? We're going to cover our progress since we were last together, and we're going to wrap up with our future outlook. So with all that, let's jump in. As a refresher, our mission has not changed. We ensure global health care providers have the right products at the right place and time so that they can focus on doing what they do best, which is caring for patients. Our mission is powered in 2 ways: The first is our scale. Our segment generates about $12.4 billion in annual revenue across Cardinal Health brand product sales as well as other distributed products. $8.2 billion is from distribution, what we call other national brand products and $4.2 billion is from our Cardinal Health branded product revenue. The second way our mission is powered is through our global reach. We sell Cardinal Health branded products in 46 countries. So now we're going to transition into talking about our integrated value proposition. We've built and invested in a scaled model that delivers value for our customers. Our combined offering brings together scaled distribution, which achieves the best economics for the customer, it brings together supply chain expertise which is focused on a best-in-class customer experience, and it brings our broad portfolio of Cardinal Health brand products that are designed to meet customers' needs. Together, this gives customers the resiliency, the standardization and the efficiency that they require in today's environment. For these reasons, in the U.S. we are a leading medical product distributor to hospitals, clinical laboratories as well as ambulatory surgery centers. And about 30% of our U.S. hospitals rely on our integrated model. In Canada, we're a leading medical product distributor where we support about 60% of Canadian hospitals, while in the rest of the world, we focus on selling our clinically differentiated products. Our branded portfolio is central to our strategy. Our brands like Kangaroo, Kendall, Pro Texas, Monoject, they are recognized and trusted names in all health care settings. And they're also used daily in all sites of care from surgical kits, the vascular compression devices to PPE and more from the prevention of pulmonary embolisms and malnutrition to the management of chronic conditions like urinary incontinence. So let's take our Presource kits as an example. These kits contain nearly all the medical products scalpels, gloves, surgical tools and more that are needed to perform specific medical procedures. Think about heart surgeries, C-sections life-saving operations, our kits are tailored and they're ready to go, driving efficiencies and saving precious time. We manufacture more than 75 million pre-sourced kits every year in the U.S. for U.S. hospitals and surgery centers. I know that's an impressive number, 75 million every year. We estimate that our surgical kits and products are used in over 30 million surgeries each year. And without these kits, surgeries could be canceled or postponed, which would impact patient care. Our branded products are critical, critical to the delivery of care now and into the future. So now that we've talked about the depth of our model, let's talk about the progress we made. And as I open up, I love this slide. When we were together last, we talked about our improvement plan. And in 2 years, here's the headline. We've successfully delivered positive profit and positive cash flow. We were highly focused on mitigating elevated inflation. And for that, we have delivered, and I'm happy to share that is behind us. And more specifically, we increased segment profit by $240 million FY '23 to FY '24 and this has returned the business to profitability and growth. As reflected in our guidance, we are continuing to grow in FY '25 with approximately $130 million profit outlook. The team has worked very hard to build this momentum. I'm very proud of them. And now we can pivot to sustainable, accelerated growth. So now I'm going to talk about how we will achieve this over the next several years. Our strategy is largely unchanged. We remain focused on accelerating growth of our Cardinal Health brand products while continuing to further simplify and optimize our operations. First, we have to grow Cardinal Health brand. We have a clear plan for 3% to 5% annual growth, which is focused on retaining our customer base and growing in line with industry's 3% to 5% growth, modestly increasing penetration from our existing customers, delivering on our 5-point plan for product growth. And lastly, we have to continue to offset the impact of tariffs through our mitigation actions. Second, we have a very strong track record of simplification and cost optimization. And we will continue to transform our global manufacturing footprint, will improve our distribution cost to serve by optimizing our transportation spend will accelerate our warehouse productivity through standardization and also scaling our use of automation. After FY '26, we will deliver annual profit growth of at least $50 million in a very dynamic environment. So now let's go a bit deeper on our first strategic pillar, which is how we drive Cardinal Health brand growth and penetration. We remain very focused on our 5-point plan for product growth and the leading indicators that we know are critical for our success. And it's important to call out we've significantly improved in all 5 areas since we were last together, and we have the proof points to illustrate this. I'm happy to share that our global service levels are up 11 percentage points over the last 3 years. And for perspective, 1 or 2, 3 -- 1 or 2 percentage point increase would be considered notable, 11 points is a huge improvement. We're also listening to the needs of our customers and remain committed to new product development and innovation. We've introduced a number of new products while refreshing our branded portfolio. That includes 2 major launches. The first is our Kendall Smart Flow. It's the next generation of our industry-leading compression platform. It's designed to help prevent blood clots, improve circulation and treat pain and swelling post surgery. The second launch is our Kangaroo Omni. It's our next generation of our enteral feeding system. And in that category, we continue to lead the way in enteral feeding from hospital to home and from infancy to end of life. The combination of improving global service levels and improving on our promise of our portfolio is excellent customer experience. And as you can imagine, driving an excellent customer experience is absolutely our north star, and customers are noticing a difference in how we support them. In fact, we are best-in-class in the industry when it comes to customer experience, and I'm incredibly pleased to share that we achieved an 18-point increase in customer loyalty index over the past 3 years. This matters because great customer -- great service levels and great customer experience drives customer retention and our ability to win new customers. This is ultimately how we unlock the growth of our Cardinal Health brand products and drive penetration. And it's why we delivered 3% revenue growth of our Cardinal Health branded product portfolio over FY '24. And that was the first time in 5 years that our branded portfolio had grown. And I'm pleased to say too that in FY '25, we're projecting similar growth. This tells us that our 5-point plan is working. We're also confident in our momentum with over 5% U.S. growth in our most recent quarter, and we're expecting similar growth in the fourth quarter that we're in right now. All right. So as I promised, we were going to get to tariffs. So let's talk about how we're managing the tariff environment. Let me start with the hard part. Tariffs continue to change. They literally might be changing while we're all sitting here and I get down and someone will tell me I'm not kidding. I've been with customers and I sat down and someone told me something I just went through changed in that moment. It will happen, but there's a good part to this. We have a very clear approach to mitigate the impact of tariffs on our business. The work we've done over the past several years to optimize our global footprint and increase supply chain resiliency has enabled us to mitigate several hundred million dollars of the tariff exposure. We've increased U.S. manufacturing capacity and diversified away from higher-risk jurisdictions. And as you can see, the U.S. is now our largest country of origin. We've also proactively diversified our supplier network and reduced our dependency on China, which now represents 10% of our cost of goods. We've taken additional steps to reduce tariff exposure and related costs by deploying AI in order for us to be compliant with government issued exemptions as well as focusing on pre-stocking inventory where possible. And beyond this, we are actively working with government agencies to receive industry exemptions to protect supply for our customers. Pricing actions with customers are a last resort. And we are having those conversations with customers today about the remaining cost incurred. But that's not all. We're also working hand-in-hand with our customers. We've identified win-win opportunities to help offset the impact of tariffs by growing Cardinal Health brand penetration. All right. So let's look at how all this comes together. As it shows here, we initially faced approximately $450 million of tariff costs, assuming the current tariff rates. That's why our mitigation efforts I just outlined are so critical. It's because of these proactive moves that we have a clear line of sight to mitigating $250 million to $300 million of this total. And we've already mitigated the vast majority of this. We now estimate that the remaining gross tariff cost at $150 million to $200 million in FY '26. Combined with additional mitigation efforts, our actions will reduce the net impact of tariffs to between $50 million and $75 million in FY '26. And we'll continue to mitigate the impact of tariffs over the next several years. It takes a strong team. It takes a strong strategy to weather the current environment, and I'm pleased to say that we have both. Now there's also another lever that helps us drive net savings. So we're going to talk about cost optimization. We have a really strong track record when it comes to simplifying our business and finding opportunities for net savings. First, we streamlined our commercial footprint from 128 to 46 countries, and we're deploying the right go-to-market models to drive commercial performance. Second, in order to optimize our production capacity, resiliency and scale, we reduced our manufacturing footprint from 34 to 29 sites. And finally, we have a clear strategy in place to improve our distribution cost to serve while meeting our customer needs. This work includes increasing space in our distribution network, optimizing transportation spend and improving warehouse efficiency and also optimizing our labor cost with automation. We anticipate SG&A growth of less than 1% in FY '25. These actions allow us to focus on the highest priority actions. So let me wrap up. We are mission critical to health care. We ensure global health care providers have the right products at the right place and time so that they can focus on what they do best, which is care for patients. We have returned the segment to growth and profitability, and we're well positioned for sustainable growth going forward. We have a clear plan for Cardinal Health brand growth and penetration. And as I pointed out, and I love saying this, it's working. We remain on track and are successfully driving simplification and cost optimization across our business. Despite the tariff environment, we are confident that after FY '26, we will deliver at least $50 million of profit growth annually. My team and I know what has to be done, and we understand how much our customers need us. And we are committed to the growth and success of this business. So as always, thank you for your time today. And with that, I'd like to welcome our CFO, Aaron Alt up to the stage.

Great. Thanks, Steve. Where is the round of applause for the finance guy? This is a tough crowd already seriously. All right. Good morning. I am delighted to be here again. As Jason referenced, it's been 2 -- it's been a few short years, 2 since we were last at the stock exchange. But I am really delighted to be here to talk about my favorite topic. Well, one of 2 favorite topics, shareholder value creation. And I guess is what the second top favorite topic is? That would be cash. Thank you. And we will talk about that later in the presentation as well. Now you've heard from Jason and each of our business leaders about the strategies we've been pursuing. You've heard about the operational plans. You've heard about the focus. You've heard about what gets measured gets done. I'll reference that, but I'm not going to repeat their comments. I am really here to talk about how it all ties together. But before I do that, I hope you also all noticed the press release that we issued this morning, which I had a lot of the numbers in. So for those of you that didn't see the crib sheet, it's there, let me give you the quick summary of what it says, guess what, fiscal '25 guidance is up. Great news, fiscal '26 guidance is out there. It's a very positive force. We have new long-range guidance as well. We've extended the 12 to 14 through '28. We are highlighting the key investments. I'll touch on a couple of more of those today. And we are also confirming the disciplined capital allocation approach that I hope you have seen us be loyal to over the course of the last couple of years. So like I said, my goal, tie it all together for you. At the end of the day, I want you to walk out of the stock exchange today with the understanding that notwithstanding the initial success as a result of those strategies as a result of the detailed plans you've heard about, as a result of the wide-ranging efforts, not just to the people in this room, but the entire Cardinal Health family, we have good reason to believe there's more value creation ahead. All right. But first, before I can talk you through the long term or next year, we have to talk about where have we come from, right? And I think it's important that we at least take a moment to celebrate what has gone before. As you can see on the slide behind me, over the last 3 years, we have a total shareholder return of 214%, well ahead of the S&P and the S&P Healthcare Index. This is one of many ways that the management team that has coalesced in the last 3 years is how we are grading ourselves. You'll also no doubt note the directional trend. It may not be a straight line, but what you can take from this is that we are telling you what we're doing. We're doing it. We're remaining agile as we need to be. And then we're reporting back to you each quarter and then we're doing it again. And that's really how we view the relationship with all of you, which is tell you what we're going to do, go do it and report back. And we're going to continue to take that approach as we carry forward to what we'll not be at the next Investor Day, a couple of years -- a couple of years hence. Don't worry that. We'll give you a little time off. Using fiscal '23 as the baseline. As you can see on the slide, our EPS CAGR 18% plus, right? Our operating earnings CAGR is 16% plus 2-year cash flow, $6 billion. We're pretty proud of those numbers, but this slide is the last time you're going to hear about those numbers, at least today because we are very focused on the future. And as I said at the start, while we want to get that on the page, we acknowledge there's plenty of work in front of us as yet, but we do see continued opportunity for value creation ahead. So let's talk about fiscal '25. We are 3 short weeks away. Other than a midyear restatement or mid-year resegmentation, either of those, right? Talking about our results 3 weeks before the end of the fiscal year, not a CFO's greatest idea. Nevertheless, that's what we're going to do today. Last year, we -- last May, we provided preliminary guidance of EPS of at least $7.50 and free cash flow of about $1 billion. And we've given you a lot of updates over time. Someone in the audience earlier accused me of being a beat and raise sort of guy, guilty as charged, right? And this is certainly the example. We do have another update today. And as you will have seen from the press release, we are raising our financial guidance for the year to $8.15 to $8.20. Now our success is really being driven by the same factors that we have cited on our earnings call over the course of the year, continued strong demand, right, consistent market dynamics in generics driven by our scale, growth in nuclear, growth in at-Home, growth in oft and importantly, progress against the GMP improvement plan. Not everything has gone quite as expected in every part of the business, but it's the aggregation of our management team, the aggregation of our assets that have allowed us to manage to a good result and to raise our guidance again for fiscal '25. Now as you move down the P&L, of course, we are also calling down our interest costs. We're able to do that because remember that second favorite topic of cash, cash has been stronger than we anticipated. And so as a result, our interest costs have been lower. And again, speaking of cash, we are raising our adjusted free cash flow guide for fiscal '25 to approximately $2 billion, reflecting both the strong performance in the business and the team's hard working and really executing its smart working capital management. And I'm going to have more to say about that at the end of the presentation. We will report final fiscal '25 results in August but I encourage you to take a look at the guidance raise today. So a little -- a few more details on how we're getting there. We're having a good Q4 so far. We continue to see in our fiscal fourth quarter, broad-based demand. Across our pharma and other businesses, coupled with that strong execution, inclusive importantly, of the integration efforts for the strategic M&A that we've done so far this year. As a result, pharma and specialty will now deliver profit growth of 12% to 13% for the full year, which continues to include 3 percentage points of growth from the GIA and Ion transactions. GMPD's guidance has been narrowed to approximately $130 million. But I do want to point out that Q4 for GMPD will be the highest profit quarter for GMPD within the year as we committed it would be on a sequential basis. And indeed, it will be the highest profit quarter for GMPD in any of the last 4 fiscal years. And so we are pleased with the results there. We are continuing to see strong Cardinal Health brand sales. I hope you know sales. I hope you noticed that Steve called out that we're seeing that brand strength continue into our fourth quarter, and we do expect 5% growth from Cardinal Health brand in the quarter. The combination of nuclear, at-Home and OptiFreight will show profit growth of 19% to 21% for the year. How much? 19% to 21%, thank you, inclusive of both strong operating performance and the acquisition of ADS. Now I almost hesitate to put the slide in front of you. It's a value creation framework, which anyone could draw. But I think it's important to emphasize the point for you that the stuff that we're working on, given the assets we have, the portfolio we're managing, it's achievable. And so as we talk about how do we continue to create value. I want to just discuss a couple of simple drivers. The sustainable profit growth is really the left side of this page. And how do you get there? Most importantly, it comes from growth. It comes from smart business growth, and that's exactly what we're doing. It's why we're deploying the dollars the way we are. We're looking to grow the portfolio, particularly in specialty, in nuclear, in at-Home and OptiFreight. You might ask why. I would tell you because they're high-growth areas of higher margins than our core form of business, right? We're looking to win with the winners. We have some great customers, and we're looking to continue to partner with them. We get there by continuing that investment cycle and driving our dollars to where we can achieve the highest return for our shareholders. While we're doing that, we also need to be good stewards of our enterprise. We need to be good stewards of your cash, right? And we believe in doing that, and we believe in continuing to focus on our operational performance, the strong execution and doing it efficiently, right? We operate a 1% margin business at base, right? That creates incredible discipline within the paradigm of who we are because we can't afford to not understand what is the return of the investments we're making as we're walking into the overall effort. Now I do want to highlight the fact you may not have that our team has really been leading into the operational excellence and efficiency effort particularly this year, right? But over the last couple of years, really since fiscal '22, it's notable to me that we've improved our SG&A as a percentage of gross profit by 5 percentage points. It's all thanks to the focus that our team puts on this in every conversation that we have. Now we're a big company. Certainly, what I experienced when I came into the company, what others have -- we've talked about is as we tend to be very focused on the income statement, right? But we're a big company. We generate a lot of cash flow. And we believe that part of how we're going to generate the shareholder value creation is to continue to raise the focus on adjusted free cash flow and on the elements that are going to create that. And we remain focused on working on every dollar of working capital, remain focused on every dollar that we are investing for the future. I am known within Cardinal Health for having a phrase, which I love, which I repeat in almost all of our meetings, which is I love talking about taking our money out of other people's pockets. What's that mean? Smart inventory purchases, collecting our accounts receivable preferably on time, right, competitive AP terms. These are all things that are core business concepts that we continue to have opportunity on and our teams are very focused on it as part of our plans as we carry forward. If we do that on the income statement, we do that on the cash flow, right? And importantly, if we remain loyal to our disciplined capital allocation framework, which I'll touch in a second, then we firmly believe that the simple version of the value creation framework I've got on the page becomes quite powerful because it's how we will continue to achieve success at Cardinal Health. So let's talk a little bit about what those long-term plans look like. Headline of this page is that we are maintaining our non-GAAP EPS CAGR at 12% to 14%, but extending it through fiscal year '28. Of course, the new '25 baseline I just called out is the baseline for those calculations. What's different now than 2 years ago is we have the benefit of the meaningful contributions from the acquisitions that we completed during fiscal '25. We did 5 of them, right? And as a result, we're going to give you some more detail. We're going to talk about our results going forward on both a reported basis. Slide behind me actually shows the normalized view, not the reported view of the results to make the point. In pharma, in Debbie's business, for the long term, we expect a reported segment profit CAGR of 7% to 9%. That reported number [indiscernible] of 15% to 17%. This reported number reflects both the impact of an increase to our normalized again, our core business profit CAGR to approximately 10% from the previous target of 8% to 10% and the impact of the ADSG acquisition. In GMPD, we expect normalized segment profit growth of at least $50 million per year following fiscal '26, which we're calling as at least $140 million due to the tariff impact in the year. Now I will touch on share repurchase assumptions and capital deployment shortly. So for the moment, I'm going to leave this long-term target slide so long as you remember, that 12% to 14% non-GAAP EPS CAGR and move on to the preliminary estimate for fiscal year '26. On the slide behind me, you can see the enterprise guidance. If I had to summarize the slide 1 word, it would be not cash growth. We're guiding non-GAAP EPS growth of 13% at the midpoint for fiscal year '26 or a range of $9.10 to $9.30. This is 13% of growth at the midpoint right down the middle of our long-term guide. In fiscal '26, cash flow generation increases substantially to $2.75 to $3.25 billion, as a result of lapping the fiscal year '25 negative working capital unwind, our growing profit and importantly, the team is focused on improved working capital efficiency. I will touch on the details a little bit more, but you should assume that we're going to make at least $600 million of capital investment in fiscal year '26, up from the $550 million or so in '25. And that will make at least -- a return of capital of at least $750 million in share repurchases during the year. Again, you're able to see that our interest costs do remain elevated as a result of the investments we've made, the acquisitions that we've done, but we will pay debt down over the course of the year. And we're also providing generally consistent guidance with respect to tax for the year. Now for pharma, Fiscal '26 will show outsized reported growth given the contributions of the Specialty Alliance and Ion, Navista. We expect reported profit growth of 10% to 12% to fiscal '26 and revenue growth of 11% to 13% in the same period. Now about 5% of the fiscal year '26 profit growth is driven by the acquisitions. It is the case that we are annualizing the new customer wins we had in fiscal year '25 in the first half of the new -- of the next year. And that gives us a tailwind of approximately $7 billion. Over the long term, as you can see on the right side, we are also assuming 5% to 7% of normalized growth up from our previous guide of 4% to 6% long-term core pharma profit growth. And there are a couple of important key assumptions underlying the guide here as well. 2% to 3% generic market volume growth but also consistent market dynamics in our Red Oak enabled generics program, double-digit revenue growth in specialty, including in our higher-margin biopharma solutions business that the team has walked you through today. Growth in the number of providers within our MSO platforms, increasing contributions from biosimilars in partnership with CVS through Avaron. Importantly, we have no major customer contracts expiring in fiscal year '26. And also importantly, we can touch more on this in Q&A, we are also assuming that we manage through the ever-changing policy environment including potential pharmaceutical tariffs and that the impact of any WACC reductions by manufacturers will be matched by appropriate and expected adjustments to our DSA fees. We'll talk more about that during Q&A, no doubt. Look, as it comes to the pharma business, another nice thing about this business and indeed our strategy is the playbook doesn't change over the 3-year period, save that in each year, we are building on the investments we have done in the year before. We are guiding that our core growth now off of that post-acquisition baseline will continue unabated. So all in, we're expecting that 3-year CAGR and profit growth of 7% to 9% and revenue growth up 8% to 10%. Again, with normal customer renewals over the course of the 3-year period. So now I'm going to shift to other, right? The other businesses that are growing. As you heard from Jason, the 3 individual businesses that make up other are becoming an increasingly important part of our overall mix. It is no doubt not lost on you that we had all 3 of those business leaders on the stage today so that you could learn more about these businesses. And they highlighted the significant investments that they're making. And frankly, our expectation of them is robust revenue and robust segment profit growth. We are guiding normalized core profit growth to 10% while reflecting reported profit growth of 25% to 27% for fiscal year 2016, driven by the accretive acquisition of ADS. As Rob called out, at-Home Solutions is indeed a 2-part story. On the one hand, we're going to benefit from the ongoing distribution capacity and the efficiency that comes from automation and importantly, scale. And we're also going to benefit meaningfully from the successful integration of ADSG. In nuclear, we are already seeing and we expect to continue above-market core growth and approximately 20% growth from pet and Theranostics. In OptiFreight Logistics, the team will drive strong core volume growth, just like we've seen in fiscal '25, as incremental growth driven by our expansion into the hospital pharmacy also starts to benefit our income statement. All of this together will result in long-term revenue CAGR of 16% to 18% and a long-term profit CAGR of 15% to 17% on a reported basis. Overall, we expect an organic revenue growth CAGR of 10% to 12% over the 3-year period, alongside the 10% of normalized profit growth. Moving to GMPD. On the top line, we expect 2% to 4% segment revenue growth, boosted by accretive growth from the Cardinal Health brand products of approximately 3% to 5% over the 3-year period. Now in fiscal '26, we expect about 1 extra point of segment revenue growth driven by tariff-related pricing. On the bottom line, in fiscal '26, we expect, as I said, at least $140 million of segment profit as we work to overcome the tariffs and the $50 million to $75 million net negative tariff impact that Steve called out. That said, we also have the benefit of the significant cost optimization efforts. After fiscal '26, we expect at least $50 million of profit growth each year. And again, as we highlighted, we do expect to offset the majority of our gross tariff costs through ongoing operational actions and pricing. Steve and his team are on it, right? The entire enterprise is supportive of what that team is doing. And our goal is to address the tariff environment, while importantly, maintaining the improved customer service levels, the 5-point plan that Steve likes to refer to over the course of not just fiscal '26 but into the future years. So all in all, the team has a plan and they're on it, and those are our financial expectations for the next year and 3 years. Now putting it all together, as you see on the slide behind me, we do expect robust enterprise operating earnings growth, approximately 14% in fiscal year '26 given the contributions from the recent acquisitions, and the strong organic growth across pharma and our other business. So with that, let's flip to my second favorite topic, which, as we called out earlier, is cash. As CFO, it delights me to be able to call out that we anticipate greater than $10 billion of total adjusted free cash flow over the next 3 years. It's driven by continued improvements in working capital. as well as the robust earnings growth with some modest benefit from day of the week timing as is always the case when you're doing a long-term plan over the 3-year period. Over the 3 years, we expect adjusted free cash flow conversion of over 125%, demonstrating the power of the business model and, again, the team's ongoing focus on cash. And we expect this to increase in the out years of our plan as the business continues to grow. I like that curve on the right side of that slide. And what are we going to do with it? As I mentioned earlier, we have had a very disciplined capital allocation approach thus far and that disciplined capital allocation framework remains unchanged. First, we're going to deploy our cash flow by investing organically back into the business. We firmly believe that, that is the highest and best use of our cash. Secondly, we're going to maintain our strong investment-grade rating through the strong earnings growth and some near-term debt pay down. I'll highlight in a second. Third, we are committed to returning capital to shareholders each year through our dividend.

Third, we are committed to returning capital to shareholders each year through our dividend and our baseline share repurchase. And then with the remaining cash, we're going to do what we've done this year, which is we will look at opportunistic deployment, both against strategic and accretive M&A, consistent with the strategy. And we'll assess additional opportunities for shareholder return. Let's talk about each of these. The organic investment. Now I won't walk you through all the exciting investments that you can find referenced press release or indeed that the team has already highlighted for you. What I want you to take away as CFO is that we are empowering our leaders to invest not just in this year, but to invest in the 3 years to 5 years and the 10 years because we're creating a flywheel effect for cash flow and profit generation in the business. And they are finding smart projects to bring to the team for us to have choices across the portfolio. For the next 3 years, we'll invest at least $600 million each year across our overall enterprise. As far as our debt maturities and our leverage point, we do believe that maintaining a strong investment-grade rating is a critical component of our success. COVID wasn't that long ago, right? We also were investing heavily in the business. So maintaining that rating is important to us. It allows us to borrow efficiently and have the strategic and financial flexibility. We are currently a BBB/Baa issuer. That is our preferred rating, and it's where we currently sit as well. During fiscal '25, we did make significant investments, as you're all aware, against our strategic objectives. As a result, when we close the year in 3 short weeks, we will be a touch above the updated Moody's leverage target of 2.75x to 3.25x adjusted gross debt to EBITDA. We'll be at 3.5x. That ratio, of course, includes the opioid liabilities and the numerator that we pay down each year. But importantly, notwithstanding all of the investments we made in '25, we expect to be back in that range during fiscal '26, so in the next 12 months, just through normal course debt pay down. We have a $500 million maturity in September of '25, and we have a repayable term loan of $800 million that together give us plenty of flexibility as to how and when we want to achieve that objective of being back within Moody's targeted leverage ratio within the next 12 months. Of course, the strong cash generation that I called out earlier doesn't hurt in our ability to do that either. Separately, just for those that aren't as familiar with our story, I would observe to you that as a company, we have strong liquidity, both from our cash positions and the fact that we have $4 billion of undrawn, typically undrawn capacity in our revolver and related programs that backstop our overall business on a day-to-day basis. Okay. Increasing our baseline return of capital to shareholders. This is some of the good news, right? I'm here to confirm yet again that we are going to raise our baseline commitment for share repurchase, up from the current $500 million a year to $750 million a year. During fiscal '25, of course, our baseline was $500 million, and we did $750 million. So we did exactly what we said we would. We returned the baseline and then with some cash opportunity during the third quarter we did buy back an additional $250 million of shares. If you couple that with the approximately $0.5 billion of our dividend payout, that means that we will be returning to shareholders about $1.25 billion of capital each year. Now you might say to me, Aaron, those were some big cash numbers that you called out earlier. You've talked about some CapEx, you've talked about return of capital, you're going to pay off some debt, but there's still more out there. You sense opportunity, and I'm glad you sense that opportunity with us. We're going to do exactly what we said we will, and we're going to look for accretive places consistent with our strategy to pursue additional strategic M&A. And we're also going to assess additional return of capital to shareholders. As we move through the year, as we see what the opportunities are, we want to be smart and prudent with our cash dollars. Now on the topic of M&A, while there's not a slide, I do want to give you a sense of where are we focused. And it's evolved a bit since we were standing on stage 2 years ago. One thing has not changed, which is that specialty is our primary focus, right? We are delighted with what specialty networks has brought to the portfolio with what GIA and the Specialty alliance is bringing to the portfolio with what ION and Navista have brought into the portfolio. And when we did the ADSG acquisition in service of the at-home business, we broadened our aperture right? And so today, we are modestly broadening our aperture again, where our M&A focus will continue to be first on specialty assets, whether in distribution, MSO related assets or biopharma services, but also we are open to opportunities to be assessed in connection with Nuclear, at-Home and OptiFreight. To the extent we don't find those opportunities, we will be -- we will return additional capital to shareholders over time. So with that, I want to close my remarks by summarizing cash and the use of cash. And I love the slide you see behind me. I hope it's behind me. There it is. If you start at the center of the circle, as I called out, over the next 3 years, we expect to generate $10 billion plus of adjusted free cash flow. If you add to that, call it $1 billion of fiscal '25 year-end strategic cash, that strategic cash on top of the $2 billion that we keep on the balance sheet in general just to run the business day to day, that means that we have $11 billion to address through our disciplined capital allocation framework over the 3 years. As I've called out, for that $11 billion, $3.75 billion will be returned to shareholders either through our dividend. We are a dividend aristocrat and all of that means, and through our baseline share repurchases. We do expect to continue to grow the dividend modestly and to preserve that dividend aristocrat status. Now as you move clockwise around the circle, approximately $1 billion of our cash will go towards the opioid litigation payments. There's no new news there. We are continuing to pay down the liability that was resolved in prior years. And we are calling out about $1 billion used towards that debt paydown that I called out earlier, which means that after all that, we have at least $5 billion of cash to deploy opportunistically across the 3-year period. Now I should note, just as from a modeling assumption perspective, that part of our commitment within our income statement, we are assuming that we'll do about $1 billion of headline value of tuck-in acquisitions across various parts of the portfolio, largely in Specialty. And so the number might be $4 billion, it might be $5 billion. We're going to be smart about that. It's a planning assumption only. But at the end of the day, we have significant resources to get done what we are committed to do. So look, when I started my comments today, what I said to you was my goal was to tie it all together. I hope these comments have been helpful. I also comment to you that what I wanted to leave you with was this, notwithstanding the initial success as a result of the specific strategies, as a result of the detailed plans you've heard about today, as a result of the wide-ranging efforts and our focus on what gets measured gets done, right, with the benefit of the strong balance sheet and the benefit of significant and strong cash generation, our management team has good reason to believe that there is more opportunity for value creation ahead at Cardinal Health. We are -- we hope you are as excited about that opportunity as we are as a management team. With that, Jason, and I would like to invite the entire management team to back up on stage. And as they place some chairs, we will take your questions.

Half hour here for Q&A. If you could just raise your hand with questions we have mic runners in the room. So why don't we start with Lisa Gill over here.

Thank you, and thank you so much for all the detail today. I want to start with MFN. You touched a little bit about the DSA agreements. And I understand that on the distribution side, but I really want your thoughts around the MSO side of the business. So if we have MFN go into place, what could be the impact there? And then secondly, can you help us to understand how MSO agreements work? You talked about $3 billion of better margin business. But how do we think about that growth? How do we think about the margin of that business going forward?

Okay. There's a lot there. Let's maybe start with the MSO model because we did have a slide up here today that showed the various diverse revenue streams. And we're not going to break apart the margin profile for each of those other than to say, like most all of our businesses and most likely in most industries, our higher margin rates are related to the service businesses. And so when you get into the drug distribution, that's profitable for those, but ultimately, that's a much lower margin rate than the services. And maybe Debbie, would you want to take further the MFN.

Yes. Well, the way we think about MFN is, first of all, we've adapted many times over the history in our industry to these kind of model changes. We believe that the administration's intent is not to harm patients or not to harm providers, especially community providers where cost is provided at probably the most cost-effective way to deliver cost. So we do believe that if it comes, there will be some adaptation between us and suppliers. On the distribution side, we think that, again, because the administration's intent is not to harm the model, we'll be able to work through the practice side of things from a reimbursement standpoint and so forth. And then also as part of the reason that we like autoimmune space because of what Jason was mentioning. It's a very diverse set of revenues. It's not entirely dependent just on the infusion services. It's much more robust and balanced portfolio of revenue streams and the MSOs that we're investing in.

And specifically, you can see that we have about a little bit less than $1 billion of revenue through the drug side of those MSOs. So while it's something, it's certainly not an overwhelming part of the portfolio and the breakdown of the revenue.

Great. Why don't we go to George Hill right next to Lisa.

I'm going to follow up with kind of a 2-part thing that sounds like Lisa's question as it relates to drug pricing. So when we think about MFN, can you a little bit talk about your expectations of Part B versus Part D impact on MFN? And then if we roll this forward a couple of years, and this is, again, as it relates to the MSO businesses and the GPO businesses? Do you think that you're able to isolate the earnings streams in the MSO and the GPO as we worry about things like MFN, and we're going to have like Part B IRA negotiations, which start to kick in 2028? And kind of how should we think about the risk there?

Okay. So again, another multipart complex question with some clarity that we have. I guess I'll keep going back to the model. We feel very comfortable about how it is structured. And I think we talked pretty extensively here around the MSOs and how we expect that to -- it's a relevant point within those businesses, but it's a relatively small percentage of the overall profit that we get. So it's -- and it's another thing I would add with that whole thing is if there are broader impacts to the space, it may then require those smaller physician practices to want to take advantage of the services and scale that we can provide. So in some ways, it creates opportunities to help us facilitate that type of growth. But more broadly for the enterprise now thinking about from the distributor side of the equation, whether you're talking about MFN or IRA or anything like that, we've proven many times that we are primarily a fee-for-service type of operation. We're the most transparent type of P&L you can see. It's 1% margins on average. And that includes, by the way, a lot of the service businesses. So there's just nowhere for that to go. I think our manufacturer partners understand that. We've had wide-ranging historical success with us as recently as the insulin changes in pricing has happened the last couple of years. So I'm very confident that the model will continue and will survive in the way that makes sense for us because ultimately, we have to have a business model that works there. I know that was so multifacet. Is there's anything you want to add?

Yes. I would just put an exclamation point on the comment in the sense that this just illustrates the complexity of navigating the landscape for whether it's a small pharmacy or an independent community physician, the backbone that we're providing through our MSO services is really kind of the survival mechanism in the future for this very important way to provide care to patients and their communities.

I think an interesting analogy that we've talked about at times is the retail independent pharmacies. It's very different than those specialty physicians, but there is a common element of both need the benefit of scale that these MSOs are providing or the pharma distributors in the past for the retail independent pharmacies. Health care is complex. It's also very competitive, and we can provide a lot of scale, a lot of advantage, a lot of expertise to these physicians in the same way that we've demonstrated help facilitate the survival and hopefully the thriving of those specialty physicians, just like with the retail independents.

Let's go to Mike Cherny there.

Perfect. So you spent a lot of time on tariffs and very helpful math on the GMP side. Maybe you think about tariffs and the potential for sectoral tariffs on the pharma side. How should we think about the moving pieces, in particular, the ups and downs that you would see across brand and generic? I mean, wrap specialty wherever you want, but just thinking about those 2 sides of the pieces?

Yes. So maybe I'll kick it off again. I'd start with the vast majority of the products that we sell within the pharma distribution channel, we take ownership possession of title of as it's in the United States. So we're not responsible for that overseas process and shipment. And so just mechanically, we start with the fact that it's, of course, very relevant and very important for our customers and ultimately the affordability with patients and the accessibility of products. But the model today is set up to accommodate that. Now when you're looking at the broad base of different countries that these products do come from, it's something that our Red Oak Sourcing on the generic side, which is primarily what we're talking about in terms of the volume that's coming from overseas is best-in-class at being able to balance both the service level as well as the cost. So we feel really well positioned with that. How it flows through mechanically? Those are all questions that we don't know the answer to. It all depends on exactly how the industry reacts to it and then chooses to price or not for it. And at the end of the day, we have that mechanism in place with a fee-for-service or another contractual connection that allows us the ability to adjust. But ultimately, there's nothing that we're aware of as it relates to underlying process that would directly materially impact our profitability in any way. The 1 thing I've highlighted about this topic, whether we're talking about the pharma business or with GNPD, we're confident in the model. We're confident in our ability to manage through it. It's -- it may take a month or 2 a quarter or 2 depending upon do we see it coming or not. So the only caveat I do have is if I get notice today that we have to completely change the industry tomorrow, that's a problem. I'm not worried so much about our financials. I'm probably more worried about the shortage and the difficulty of moving that through the supply base. But those are things that are all hypothetical at this point and why we're making as many trips to D.C. as we are to make sure that we're at least as aware as possible as to what's coming our direction and how we'd manage through it. Again, I'll turn to my left.

I think you covered it.

Great. Let's go right here to Erin.

On the MSO side, again, to another MSO question, but you have this slide that goes from 2,200 providers -- sorry short here. 2,200 providers to an undefined number, where does that go over time in terms of the scaling effort there? And then what's organic versus inorganic? And you carved out that little $1 billion in that -- in terms of capital deployment, specifically dedicated to tuck-in M&A. I guess, can you just remind us what's incorporated into your kind of segment level operational assumptions from an M&A perspective, if any? And is there anything near term in the hopper, and that's why you called that out?

Sure. Great question. Let me start at the back and work through it. We do anticipate that we will continue to take a strategic view of M&A that's out there. Certainly, there are opportunities in the marketplace. And we see going to assess them with a very fine lens to understand if they are as strategic as the assets that we've acquired already. We do have $1 billion or so across the 3 years built into it from an assumption of enabling Dr. Weber and his team, enabling the Navista team as well to both go broad and deep within the MSO areas, while also importantly, understand that we are looking to continue to grow and build inorganically or organically the other parts of Specialty as well. And so that $1 billion is not allocated specifically to Dr. Weber and Navista, but rather across the portfolio. That said, we are enabled with the overall opportunity. The numbers we called out, the guide that we called out did not assume material M&A in the portfolio. We believe we can accomplish that with what is currently in the portfolio. That said, Dr. Weber, we encourage you to grow organically, as you know, right, as well as inorganically. And the same is true for the Navista team who is also in the room.

I'm surprised you at one of the -- you can tell that Aaron has a lot of ways of saying things and certain phrases that he likes. I forget the exact words you often say, something like a competition for the resource, the competition for the investment. I'm surprised they come up in that answer. It's a healthy competition. We -- and what I respond is if I tell each of the 5 operating segment leaders is make us say no. And that's -- and we do on occasion, but they also have a really good understanding of what type of investment is value accretive. And as long as it's trading the right type of value, then it's great. When you get to M&A, it's a little more binary and right, and that's at times we probably see a lot more time to know there. But ultimately, what we want is each of these 5 segments to feel accountable and that they're able to drive their own results and have access to the investments. We're not going to pigeon hole them right now and say, "Well, you're going to get all of it, you're going to get none of it." We need that type of competition to make sure that we're finding the best ideas and opportunities. And I'll say looking over to Rob Schlossberg, I know he's used that, hey, you told me to make you say no for something, and that's how the ADS idea came to light. It was a little earlier than he knew I was ready for it, but he puts such a fantastic opportunity in the table we had to say yes.

Let's come right here to Eric Percher.

So following up on that concept of different growth opportunities and different investment priorities. If we turn to the GMPD segment, can you give us some perspective on how you and the Board look at the portfolio overall? What you're expecting from that segment? And what would lead you to consider or how you consider what assets should remain part of Cardinal?

Yes. And I knew questions like that would occur, and so I tried to get in front of it a little bit, but apparently not enough for you, Eric, that's as part of your term. We know that GMPD -- I've been very consistent with this. The slide, but the talking points are very similar to what I said 2 years ago. There are some -- when I look at the portfolio decision, we use the framework of how does it fit strategically? What's the underlying operating performance? What's the value within our ecosystem and within somewhere else? And you bring all these things together, and I highlighted that we don't need to answer all those questions today because the main point here is performance. This is a business at the time was losing substantial profitability. It is profitable today, but there's still a lot of opportunity in front of us. And we do see synergies in the strategic side. There's clear synergies between the business and the rest of the enterprise. I wouldn't call it conclusive in that way. So there's a lot of other factors that go on to it. But the main point is, for the immediate future, we see absolutely that there's a substantial amount of value here to keep taking care of customers and patients and build on those synergies and find other ways to work together. And we're going to keep following the GMPD improvement plan, and then we'll worry about all that in a different day.

Steve is effectively creating a portfolio of choice for us by moving the business from where it was to positive profit positive cash flow.

Let's go 1 seat over to Elizabeth.

Can you dive a little bit deeper into some of your MSO commentary all around sort of the platform. Are you sort of seeing most of the growth from people who -- providers who don't have anything right now or have some sort of internal solution? Is it mostly something that they're leveraging on top of the distribution or the wins come from sort of like ex that group as well? Any broader comments on sort of the pockets of growth and how to think about that over the next little bit would be helpful. And sorry to make this stage more [indiscernible].

Well, we told him to sit there to make sure that he had a chance to get up. But I think the question, I think I'm understanding here is when MSO -- when a physician chooses to join us, what are the reasons? What -- maybe just give us a little bit more color behind the why behind the desire to join the Specialty Alliance?

Do I have an hour. No, I love the question. I alluded to it very briefly. There are increasing challenges for the independent physician out there. The initially 1 doctor practice became a 3, 3 of them came together became a 9. Then they realized the value of bringing in higher level back-office support, but they can't afford to do it in a way. So we've actually been seeing increasing number of practices reaching out to us and saying, "We love what you're doing. We saw you initially partner with private equity to help build a back-office support to provide ancillary services. But we like even better what you're doing now. You got off that married around of private equity. You're now with long-term strategic partner. That long-term strategic partner can provide capital to help us grow expertise, as I touched on. But we're having people actually reaching out to us. We barely penetrated that independent practices and they become dinosaurs of the small practices. So the fact is if we can help support practices in the community to really provide the best quality care at the lowest cost, we think more and more of these practices are going to want to join, GI, urology, neurology, rheumatology. So that's kind of where it's coming. They need that help, but they want to keep their clinical independence as well.

Let's go 1 over to Daniel.

Daniel Grosslight with Citi. Thanks for all the great detail, and congrats on another strong guide. Last, I want to go back to the [indiscernible] tariffs and really the impact on GNPD. I think last quarter, which is about a month ago now, it seems like a longer time, but last month, you said that the gross impact for fiscal '26 would be $200 million to $300 million, which you would offset a majority. Now that's down to $150 million to $200 million. So I'm curious what -- for fiscal '26, what changed in the past month to give you that confidence that now the gross impact you have to mitigate is less? And of the $100 million to $125 million that you're going to mitigate in fiscal '26, how much of that is going to come from price adjustment?

Why don't I take that one because it's indirectly guidance. Look, we are, like you, updating our models every day. And there has been a fair amount of change in certainly interpretation or expectation since we issued our guidance. And what Steve put on the page for you all today is the best we know it as of yesterday afternoon with the most recent tweets and understanding of agreements that are out there. At the same time, the regulatory environment has been evolving. The team continues to work really hard on both increasing the amount of opportunities we have to mitigate the tariff impact without having to take price, right? That would be preferable for everyone, while also doing exactly what Steve and Jason said we would, not just 1 but 2 earnings calls, which go which is having the right conversations with our customers about how do we continue to ensure that Cardinal and GMPD are there for the long term in these important categories with the supply available in the key items. We're not going to today or, frankly, any day, provide specifics relative to the pricing we're taking or others are taking from a dollar assumption or on an individual customer basis. But what we want you to walk away with is, is that we are being smart stewards of the assets we have and our shareholder dollars around trying to first mitigate and where we can't mitigate then having the right conversations around pricing. Steve, how did I do?

Yes. No, the way we have certainly approached it with our customers is our #1 goal is to ensure continuity of supply, and that's where it starts. And we continue to work hand-in-hand with trade groups to educate the administration and to work towards exemptions where possible. And then very aggressively take operational changes to be able to offset the impact of those. And certainly, the last thing is pricing. But even with pricing, we're working hand in hand with our customers to find opportunities to be able to offset the impact of some of those with ways or the value drivers that we have through our branded portfolio. So it's certainly a multifaceted strategy, but it's one that we believe is the right formula.

And when they're looking to try to bridge from the earnings to where we're at today, the China tariff had changed in that time period.

The original part of the question, I mean, China went from 145% to 30%. So tactically that was the...

Technically, there's a component that we're not breaking apart all the different pieces because there's -- that changes our strategy. It's like a multivariable type of...

And it could have changed yesterday, but we're really...

Steve, just to be clear, it went from $145 to 30 plus plus the other [indiscernible] infact, right?

Plus the Section 301.

Plus tax and 301.

Yes. see how clear it is.

Let's stay in that row and get a Eric Coldwell down there.

Okay. Thanks. Aaron, you can keep putting your money in our pocket. That's good for you, it's good for us. In Nuclear, I'd love you to talk about the margin profile from fiscal '22 when spec was 75% of the mix to where it's going to go in fiscal '28 when Theranostics and PET become 65% of the mix? And then as a follow-up to that, when I look at the other segment in total, your AOI growth is 1 point below your revenue growth. What are the dynamics behind that?

Well, let me start. Our observation is as we are investing for the overall profit growth of the enterprise and certainly, each of the 3 businesses, what we're reporting on and the guide we're giving, of course, is the blend across the mix. Now it is the case that some of where we're investing early in the life cycle in Mike's business is modestly lower profit margin rate, right, but growing more rapidly space, and we continue to work that over time as well. And so I think what you're seeing in you're reducing from the Nuclear business is that we're going to grow rapidly within that business, top line and the associating profit growth, but we will have some mix benefits within the Nuclear profile. It's also the case depending on which year we're talking about as you look at other overall that we are investing heavily against the 3 businesses that are in the portfolio. And so if I take Emily's business, OptiFreight Logistics for a second, that business is wonderful business that we love. We're investing in the next 18 months in particular. And so that will moderate the profit delivery that, that business would otherwise be given to us on a broader run rate. Jason, you want to...

Yes. I would -- maybe just to try to step back and think about the other growth businesses. That mix Aaron talks about is certainly true. There's a fairly wide range of margin rates, and it probably makes sense to you intuitively OptiFreight being the highest margin given it's a purely service type of business. The Nuclear business, kind of a mixture a little bit of a lot of different things is the middle of the margin rate. So it reflects a little bit closer to the broader segment. And then the lower margin is at at-Home Solutions, but that's because of the big distribution part of the business is a lower margin within that. So the growth of at-Home Solutions is quite fast with the M&A as well as organic growth. So that will dilute the margins a little bit with there. There was another question within -- so now -- so that's like the first thing. So then you're saying, well, the margins within Nuclear, which I'm very reluctant to go to, but what I will say is, we have a variety of different models to benefit our customers. Some of it will take possession of the product. Some of it is manufacturing, some of it is dispensing their products. So in some cases, it's a service fee and very high margin. In other cases, we take ownership and title of the product, which then would be a lower margin because there's a COGS associated with that. So Theranostics is not high margin or low margin. It's a good business. It's a very good business, but it really depends on the piece. You may recall a couple of years ago, we had a RevRec change that changed 1 of the contracts, and we had to get into revenue changes that weren't necessarily impacting margins. So that's just a good example of we don't really care so much about that margin rate. We're looking at the profit dollars and the cash flow dollars associated with how that growth really occurs.

Let's come across the aisle to Kevin Caliendo.

I want to talk a little bit more about the tariffs in GPMD. Now that you kind of know where we are, at least it's a little clearer now, has it changed the competitive landscape?

Have you seen something I haven't. [indiscernible] right now. It's going to change, right? It's going to change.

I guess the point is, is there a change in the competitive dynamics in the industry now that we know China is more expensive has it changed your position? Does it change your strategy for the business in any way, shape or form given how you source versus maybe how some of your peers source? And does it create an opportunity?

We've always felt great about our global footprint, but Steve you want to take that?

Yes. I mean, first of all, we don't think that the tariff impacts are unique to us. So let me start with that from a competitive environment. The investments we [indiscernible] to compete. We feel good about our position to compete. And when you think of the work that we're doing around our global manufacturing footprint, we've seen this as opportunities to increase our production of Cardinal Health branded products where we could in the United States. So we've expanded our syringe capacity in the United States. Now we make all of our syringes in the U.S. We've expanded incontinence. And we've had an opportunity to expand in our reprocessing business and several other categories. So number one, we think that, that helps better position us into the future. And then, of course, to have a strategy to be more resilient, which customers expect, I mean, a lot of that is taking the process and the time to better -- to source in less high-risk jurisdictions. [indiscernible] be more North America based, and those are the steps that we've been taking going forward.

And the only thing I would add is, when you think about just risk and exposure throughout the world, as Steve's slide highlighted, we only have 10% in China. We feel really good about that. I believe that is best-in-class industry. And when I think about what could happen there. That's something we feel really good about. The 35% in the United States, and we feel really good about that, and we've moved more in this direction as best we can over the last few years, and we're going to continue to evolve. And that will be dependent, another multivariant type equation we're going to have to look at to ensure that we adapt to what's out there. And more and more, we're going to have to have multiple sources to ensure that we have that flexibility.

Let's come up a couple of rows to Allen.

Just one is for Debbie. The MSO adoption among physicians is much lower within some of the areas that you're investing in, autoimmune, urology versus where it is in oncology and that's at the market level. Can you talk about why that's the case? And then as you think about growing your provider footprint from here, is the growth -- how to think about the growth between oncology and some of those other specialties? And I guess as a physician in those different specialties, what are some of the things that maybe make those different specialties different? And why oncology has sort of led the way initially with MSO adoption?

Okay. Well, I'm not a doctor, sometimes I play one on TV, but I'll answer the first start, and we can see if Dr. Weber weighs in. But first of all, oncology just had a huge head start. I mean, oncology, Dr. Weber notwithstanding from 1995, just holistically, the market started moving. There was a lot of drivers also that health systems were jumping into the oncology space, most aggressively, specifically with that therapeutic area. So it kind of jump started the whole oncology space. I do think as a disciplined oncology is one of the more complex data-driven, just the range of the practice probably lends itself earlier on in a more obvious way with respect to also the drug pipeline, the need for real-world evidence that holds sort of flywheel around the practice, the patient, the data to just kind of was developed in the oncology space. And then other areas have been not necessarily copying or following [ suit ], but just coming to a similar realization based on the challenges of their own practice ecosystem. So that's why oncology is where it is, and there's a bigger percentage of oncologists who've already either moved into the health system space or they've joined an MSO. We like autoimmune because it is in a much earlier phase of development. So that presents a much bigger total addressable market as it's still highly fragmented. And I think Dr. Weber already captured well the reasons the practice would be looking to join something that's scaled to help them out. And I don't know if I got all parts of the question...

I think there's other pieces, but let me add 1 other things I think you went down into some really key points. Let me maybe make a simpler point. If I'm someone that's looking to roll something up or on PE or whatever, I go to the biggest part of the market. Oncology is the largest. And so it makes sense that when you're going to start a roll-up strategy, you start with the largest. And that has certainly been a component for why oncology was first combined with all the other value that does then follow through to patients through that process. And then when you think about our strategy, I think it would have been very hard, if not impossible, to do this before because we're bringing together not just distribution, we're bringing together the data and technology with Specialty Networks. We're bringing together the MSOs. We're bringing a holistic solution that if we were just doing the MSOs, like what Dr. Weber started 20 years ago, that would have allowed a certain pace, a certain allocation of capital and all that. But when we're able to come at a much more holistic broader solution and bringing together these investments to solve challenges in other therapeutic areas, it opens up a lot of doors that if you're only focusing on one of the therapeutic areas, it may be hard to justify Specialty Networks type of solution or something along those lines. I think the other part of the question was into other therapeutic areas and where the -- where we'll go next or...

[indiscernible] and then you're talking about a lot of growth over the next [indiscernible]. How to think about that growth?

Yes. I would say that 1 of the slides that Debbie outlined is that we have -- for our priorities, we laid out that we've got Navista with oncology. We have the Specialty Alliance now with multi-specialty and urology kind of place is a little bit between there. We're not going to pick which of our 3 children. We love the most with this. Those are the areas that are our highest priority. And then we're going to need to look at just the -- what types of partnerships are available. But we have the capacity, the resources, the expertise, the skills when we look at Specialty networks as well as the MSOs capabilities now and of course, our core distribution and GPO capabilities, we're able to satisfy the needs of the -- broad needs of those physicians in each of those 3 areas, and I think we're going to leave it at that for the time being.

Come right here.

Steven Valiquette from Masimo. Just a question on Slide 31. I don't if you're able to pull that up or not in the overhead, but if not, then no worries.

We make them all by heart at this stage. So if I just describe it, I'm not actually [indiscernible].

Okay. I guess, a bit of an old-fashioned question on traditional generics. But on that slide, you talked about 2% to 3% generic volume growth. I think you also referenced $125 billion worth of small molecule branded drugs having lost exclusivity. I kind of feel mechanically, that could almost drive the 5% to 7% profit growth you're talking about for the overall segment. So I'm guessing the offset there might be perhaps an assumption on maybe some generic deflation on the base generic portfolio. Just trying to understand kind of the additional assumptions there on just that generic if you're able to quantify any sort of assumptions around generic price in that [indiscernible] I know you try to keep that more high level, but I just want to just confirm the thoughts around that.

Who wants to take that one? So I think I saw your paper on that. Did you already make some comments on that one? Yes. Yes. Okay.

That number. $125 million was very close to my number. That's what I [indiscernible].

Yes, we might go into the same answer, but we got there maybe different ways. It is a nice pipeline it's with a couple of big drugs is what's really driving it in the '27, '28 time frame. So I think there -- that is to be determined the exact timing of the rollout, how many different manufacturers are coming to market with the product make a big difference in terms of the benefit, the driver to our earnings. So it's just when you're 2, 3 years out, there's just not quite as much visibility to kind of lean in it in the way that think you're presuming. So we are not assuming. We told you straight up our assumptions I think it's possible that we would have some opportunity there. But I would want us to be a lot closer to the launch and the rollout and have a better understanding of how many different manufacturers are going to come to market, which, like I said, is a bigger driver to that profitability as you ramp that up.

So unfortunately, that needs to be our last webcast Q&A. We'll have plenty of time for more questions over lunch. But go ahead and just have Jason say last few words.

Okay. Great. Well, thanks for spending as much time with us today. If you could remind me, Matt, what I'm going to be saying here. So as you can see from today, there's a lot to be excited about here. So we really appreciate the fantastic questions and the attendance. we really do believe there's a few companies that can offer the fantastic balance that we have of a resilient business model, but also just these fantastic growth opportunities still in front of us. This is a result of favorable underlying trends in the industry, but it's also because of the very direct specific actions that we have taken to evolve into those higher-margin, faster growth parts of the marketplace. But the last thing I really want to get to here is to kind of finish with one of the things I started with Matt to talk a little bit about the leadership team. Now that you spend a little bit more time with them and you got to know them a little bit better, I already told you the data about them, right, that we've all been in our roles for 3 to 4 years. That means we're the ones that came up with the last strategy and we're the ones that executed it over these last 2 years. And you can see that we've accomplished a lot with all the data and all those results. But I hope you also picked up a little bit more of the softer side of what we're about and our culture and our values and all that. But I think you probably will also pick up, whether it's in this form or other discussions with us. And certainly, when we have lunch together here is that we're absolutely a very gritty bunch. We understand the business very well. We understand the operations very well and how that flows through to our customers and ultimately to patients. We know how those operations then connect to the strategy. I think the best strategists are the ones that understand the business the best so you can look around those corners and see what's coming at you. We know what we need to do today to make sure that we're successful tomorrow. So I'm confident in this team. I'm confident in the team that's in Dublin, Ohio, right now, watching all this. And I'm confident that we're going to continue to execute our strategy together and that we will hit these long-term targets. Thanks.

Great.