Good morning, everyone. My name's Eric Coldwell. Obviously cover a number of healthcare names, with Baird. Been with Baird quite a long time and not as long as I've covered the pharmaceutical wholesaling space, which is obviously a lot more than that today. But it's been a pretty amazing handful of years here and- I agree. I've said this several times and maybe blowing smoke, but my favorite management team at Cardinal in my lifetime, and I continue to enjoy having you guys at events, hopefully many years to come. Pleased to be here. Thank you for being here. So of course, we have Jason Hollar today, and David Frost wants to, NIR wants to make a quick comment before we get started. Just a quick comment. Yeah. Then we're going to jump straight into Q&A. If you guys want to send questions up to the front, I'll happily take those on the iPad. Otherwise, I have, believe me, more than enough. You do. Okay. Yeah. Quite a stack there. Yes. Just as a little bit of housekeeping, we will be making forward-looking statements today, which are subject to risks and uncertainties that could cause our actual results to differ materially from those projected or implied. For a description of these factors, please review our SEC filings, which can be found on our investor relations website at ir.cardinalhealth.com. Thanks. Thank you, David. Okay. Bit of a warm-up here. Soften you up before the hard ones. Sure. All right. You just provided fiscal 2027 guidance. You absolutely crushed last year, more than $2 of upside versus the original midpoint. Yet on a normalized basis, you still see earnings growth at or above the LRP. Against a tough comp, against a massive upside year, more incredible strength. I am guessing that you weren't planning on beating last year by over 20% all year long. Talk to us about the three or four biggest upside drivers and which of those are sustainable versus which were a bit more transitory, because that will lead to some of the follow-ons regarding the fiscal 2027 outlook. Yeah. Thanks again, Eric, for having us here, and thank you all for attending. It may sound like a simple softball type of question up front. It's actually a little challenging to answer because it's hard to boil it down to just three or four things, because I think that's the real testament of a great management team, a great business, a great industry, is the breadth and the depth of the activities and the opportunities that we see in front of us. When you think about that over-performance in 2026, it was every one of our five operating segments performed incredibly well. Every single one of them had earnings growth of at least double digits, irrespective of the M&A. They each had some really great cash flow, which was another great story for us this last year. And we have recently increased our long-range targets for the pharma business in the last investor day, and we are forecasting for and guiding for growth to be a little bit above even that- Yeah type of range. So we have raised the bar on ourselves. I do get the point that that is lower growth, still strong growth, but lower growth than we saw last year. So the reasons why the key differentiation there. Let's break it all apart so we have that breadth of each of these five businesses doing really well. Within each of these businesses, I think it's important to think about the stuff we can control and the things that we have more difficulty controlling, like volume, utilization. That's been very constructive, very strong. I like the word constructive because just having the volume by itself doesn't mean you're going to have a great result, though. And we've seen that in the past. The last several years, we have taken that predictable, relatively modest, consistent growth, and we translated it into a fantastic result, and that is the performance that we have led. But that underlying utilization continues to be very robust, but we anticipate it being a little bit less robust than we saw this last year. A few reasons why, specialty at 25% growth for us, that is really strong volume. Part of that driven by the M&A, part of that driven by some new customer conquests. Those are the types of things that are going to happen at a lower rate going forward and why we think it is more prudent to have a more normalized type of growth rate. Generics, that one is a little bit harder to pin down. It has been quite robust, but you are talking about relatively small percentage changes to that baseline 2%-3% growth that we have in our long-term plan. Demographics and innovation, loss of exclusivity, all elements that are driving a nice answer. That is a little bit more difficult to pin down exactly where that is going to be period to period. But we saw good growth last year, and we anticipate still good growth, but not quite as outsized as we have had in the past. So overall, from a pharma perspective, strong volume, doing a lot of organic and inorganic investments to optimize that, not just for our benefit, but for that of our customers and ultimately for patients. Other has been a great growth story as well, of course. Same thing, organic and inorganic investments. When you think about the inorganic investment with the ADS, now we fully lapped that, so that means that our growth rates going forward. We are not going to have quite that same upside, but we are now replacing it with some other acquisitions with Strive and the diabetes segment of the AdaptHealth business. So we do have some inorganic opportunities there too, but the core growth, the synergies from the prior acquisitions, the Theranostics and nuclear, the expanding the product portfolio and OptiFreight, these are all specific investments that we made that we do think will continue to drive good growth in the future, but not quite that outsized growth we have had in the past. The one big surprise we had this last year that was outside of our guidance on GMPD. Core growth, right where we thought it would be. The tariff refund created some positive noise for us. You strip that out, and the results were still fantastic, and so it was just a nice add at the very end. But ultimately, the core growth there being right where we thought it would be as well. So those are some of the key points. When you look back on the last year, you have these five segments, a lot of moving pieces, but overall, really good performance. You have a tumultuous global environment, right? War, tariffs, commodities, you name it. What were the aha moments? Was there anything that happened in fiscal 2026 or even fiscal 2025 where you said, "You know what? We need to double down here, or we need to back off here. Yeah. You went through a big strategic review just a few years ago. Yep. I assume there's probably not a lot of those conversations, but maybe a few. Well, you always have to challenge yourself. Yeah. You want to be your own activist. Yeah That is how you approach it. Not many things that we had to back off. I think in that in and of itself may be an aha, that we were closer to the center of the target with our strategy than perhaps even we thought. The execution, the connectivity of all these pieces. Again, using specialty as a reference point, 25% growth with specialty, that didn't just happen with M&A. That didn't happen with new customer onboarding. It happened with also taking care of all of our other existing customers with service and support, and these all kind of aggregated in a way, the flywheel effect, that helped create value across the spectrum. So I think the aha was the strategy really is not just working the way we thought, but in ways we didn't even think were going to be possible. Our nuclear business with Solaris Health, I think, is a good example of that. We knew there were opportunities, bringing on the urology MSO. We knew that we were the leader in the nuclear pharmaceutical space. The pull that the nuclear team is seeing from those urologists to help them with their business and help them be a better urologist, a better physician to those patients, there's just all sorts of those opportunities with our MSO strategy that we knew were out there. But the thirst for having the connectivity between this huge suite of services and products that we provide to these physicians that have an incredible number of needs to take care of their patients every single day, has been a really nice fit. Then, of course, just the other growth businesses fill in all these categories quite nicely. We knew that was possible when we resegmented the business three years ago. Not even three years ago, and a lot's changed over that period of time, and we've seen some great growth. Maybe the aha there was the ADS transaction, that acquisition, the synergies went so well above our expectations that we were like, "Okay, not only do we see the value there, we feel confident with the integration where that's at, we can go faster." That's why we picked up Strive and the diabetes segment of Adapt as well. So these all are coming together in a way that are very accretive, very synergistic, and gives us confidence that we are going at the right pace to continue to look for those growth opportunities. On the last earnings call you made, well, I think it was Aaron, actually, but there was a very interesting comment. "For planning purposes, we are assuming a consistent book of business." Was that a throwaway comment, or was there something more hidden behind that in terms of we know something you don't know, or we're getting ready to do a deal, but we're giving you guidance before a deal? Well, it felt like there was more. Let me tell you what it is, and I'll let you define if it was a throwaway comment or not. Remember the prior year, we had a significant tailwind for new business onboarding in a number of our businesses. Yeah. Biopharma Solutions with our Sonexus business, but also core distribution, picking up some large customers that lapped midway through 2026. So we had this tailwind in 2026 that we do not see repeating in 2027. At the beginning of the fiscal year, you have a pretty good understanding of what your book of business is going to look like for the next 12 months. Even if we get a great new customer today, it's unlikely to generate a lot of incremental revenue margin in the current fiscal year. So this really is just for planning purposes that we wanted to highlight that at that stage, we didn't see the book of business changing materially for especially our larger distribution customers. That's just different than where it was in the prior year, when we felt it was important to make sure that when you look at the growth rates of 2026 to 2027, you understand that distinction. When I re-upgraded the group, February of 2020, a few weeks before the national emergency with COVID, which was interesting. There were several, but one of the main tenets in our upgrade thought process was, for the first time in my life, I was watching what felt like a very steady playing field of basically a, pardon the term, an oligopoly of companies playing well in the sandbox, not seeing big churn, not seeing big negative revisions with customer renewals. You just announced one of your larger clients, Kroger, has renewed and I believe extended. I'm not sure Long-term if there was an expansion. Yep. Yeah. Five years? Long-term. Long-term. Okay. You didn't have to back off putting up upside LRP against upside base year. Are we at a point now where an existing customer, an incumbent customer renewal, is just a non-event unless it only becomes an event if they leave? A couple of things here. First of all, it's our key responsibility objective to provide continuous improvement to our business that, of course, our customers are always looking for additional value. Yeah. They're in tough, competitive environments as well. So we have a desire and work streams to always get better, use technology, use AI, use productivity, use automation to further improve the business, so we can have it both ways. So we can provide value to our customers, while at the same time growing our business in a way that's consistent with our expectations. With that said, the comparison points that I think you're referring to where perhaps that dynamic was most out of balance was some other environments where the underlying industry was going through some changes. When you think about the generics, at the beginning of the toughest period of time was in the 70% type of penetration, and that went pretty quickly to 90%. Well, that created a lot of value, because that's also when the buying groups were formed, right? Yeah. It created a lot of value that then was exchanged in different ways with customers. Well, it has been at 90% penetration for the seven years I have been at Cardinal. It has barely moved. It is a nice evergreen, new products coming in both brand and generics. That dynamic of that creation of this incredible amount of incremental value, incremental currency that was then passed back and forth with your customers is a dynamic that is just different today. It is much more consistent. We are seeing much slower growth, but consistent growth with generics, but not this really significant step cliff event that created all the activity you are talking about. I just do not see that that will change in that same way. You throw on top of that, for the wholesalers more broadly, but certainly for Cardinal- that part of our business, while it is growing, is growing slower than the other parts of our business. It just becomes less meaningful, less impactful. Still important to us. These are still important parts to the customer, an important part of the core and the base, but there are a lot of other parts of our business that are growing faster, usually higher margin parts of the business as well, that makes that impact, that relative impact, even smaller then. You and the rest of the industry went through a period of really balancing out profitability across all of the different channels, both with customers as well as with the therapeutic categories. is there more to be done there with the growth in specialty that we're seeing? I know the generics are stable at 2%, 3%-ish. volume, but with this rapid growth in specialty, this rapid, well, debatable, but a lot of biosimilars coming to the market. and having some impacts, right? Some effects, yeah. You are still seeing some pretty tremendous growth rates in specialty. Yeah Despite that, do we need to go through another round of renegotiation or hammering out contracts with customers on where mix is today versus where it was 5- 10 years ago when the industry went through that last big round of conversation? Well, I think the whole industry has learned about those mix challenges. Yeah. I think before the mix changes happened dramatically, the contracts were not structured to be reflective of that. We have now lived in a world of significant mix changes for well over a decade, so our contracts are structured to recognize that as a low margin distributor, we cannot afford to have substantial mix changes where profitability might be different product category to product category. If the product category profitability is the same, you do not need those contract utilization requirements. But typically, there is varying product margins within a customer contract that does require a utilization requirement. We have that embedded in the contracts that matter with that profitability distinction, and then it just adjusts for itself real time, and it is not the requirement then to have these massive changes come a new contract because it has grown and it has evolved in a way that is much more consistent than what it would have been in the prior contracts. I want to transition and talk about managed services for a minute. The acronym MSO came up just six times on the last conference call, and I know I have already prepared you for this one. 19 times, 12 times, 17 times on the prior three calls. Less than a third of the average of, or I guess roughly a third of the average of the last three calls. I do not think it became a boring topic. But it definitely did not get the level of attention I was expecting. I do not believe you came out and provided a revenue framing or other additional color commentary on numbers around it. And we have not seen big growth in the number of providers in the channels since we did a deep dive on you guys, probably four or five months ago now. Again, am I over-interpreting, or was this just more of a period where there were so many other things to talk about that the MSO conversation- wasn't as visible? Yeah, I think you're over-interpreting. Yeah Let me address it nonetheless. I think that when you're talking about anything six times, that's still quite meaningful in any business. Yeah. But remember that the last large transaction we did would've been announced about a year ago. Yeah. It's been closed now for only about nine months. We're now into a much more stable environment as it relates to the MSO. Our strategy is clear. We have these three very clear platforms, oncology, urology, and GI. We have the leadership teams in place. We have the business in place. We are now in execution mode, completing the integration, which is a complex, long process, but also continuing, though, with our acquisitions. We just closed four new bolt-on acquisitions over the course of this last quarter, and it's still a critical component to the critical growth element of our strategy, which is specialty. So it's the high priority within the highest priority of our growth initiatives. Nothing there has changed, other than there's been less new things that have occurred with our MSOs this last quarter. To your point, with the fiscal year-end, I can tell you, we look at our total word count on these scripts, and it was already long. So, to bring in more content on any particular topic means that we have to bring back some other things, and there are a lot of great things happening in the company. We, of course, had the acquisitions with at-Home Solutions and further growing our growth businesses, and that was a little bit more of the focus this quarter than the prior ones. But I would anticipate you're going to continue to see very good focus from this team on not just driving the strategy, but making sure we're transparent with where we're going with the business. One of your competitors has broken out a sub-segment on this business. They've been in the business a lot longer. Bigger scale, historically. Perhaps another of your competitors winds up doing that over time as well. Who knows? But have you thought about providing more detail or transparency in terms of sizing or EBITDA contribution, percentage of earnings? Are those the kinds of things that at some point we can expect? Does it have to get to 10% before we hear about that? Well, the 10% threshold's when you have to break it. Yeah If you're managing the business that way, which that's not how we manage it internally. We bring it together as a part of the specialty strategy. Right. Given the flywheel effect, the ecosystem of the specialty business, we see it's hard to differentiate and manage it that way. When you think about how we structured our segments, we structured the segments based upon how we drive the strategy and how we operate the business, not the other way around. While I appreciate the investor desire to see different information, and we will evaluate whether or not to provide incremental information, but as it relates to segment reporting, it's a critical element to make sure the leadership team, my team that is responsible for those areas, that they are leading those areas with the accountability and the actionability to actually make all the decisions within that segment. I don't want to create something that's not actionable within the business. How we manage the business today, this is a part of when you think about specialty distribution, it's really hard to separate from PD distribution. Some of these attributes of Biopharma Solutions drive distribution in a way that we're not ready to separate those as it relates to segment reporting and how we actually manage the business. I'm going to jump in just to make sure we can cover this. We've got a couple from the audience. First off, I was going to get there, but I'm going to use the audience to get there quickly. Would you provide any additional color on the two home cares? I'm assuming that means the Adapt and Strive deal. What we can expect for more deal-making before year-end or before calendar end if there's. In other words, what's the pipeline? Talk about those two deals. Frame them. When do they close? I guess more broadly, additional deals in the pipeline. Yeah What's that look like? Sure. Yeah, the pipeline's good. It's certainly robust enough for us at this point in time. I think for fiscal 2027, I would be surprised if there's anything significantly different than what's there. Because if we made an announcement today, it's unlikely to actually close too much before the end of the fiscal year. Yeah. Even the Adapt diabetes business will be a second half 2027 closing event. Strive has already closed. Strive is primarily urology DME. Relatively small in overall size, but a very good provider of urology products to the marketplace. Fits very well with the distribution we already have in urology, and you've already heard me talk today, urology's a really key therapeutic area for us. We are the leader across so many different, really most aspects of urology, whether it's distribution, the MSO, we're the largest there. Nuclear, we're the largest there. At-Home, we're already the largest there. But this, in terms of the distribution side, but this helps give us more of a presence on the provider side. So we're in good shape there. On diabetes with Adapt, that fits really well with our ADS transaction and our core business we already had. ADS has been a fantastic success, primarily diabetes. I think part of the question there is with competitive bidding and everything happening in that space, not everyone's been successful in diabetes, but it's been a very successful category for us. I think this is one of those categories, it's growing quickly. Only 35% of people that are eligible for a CGM through insurance coverage actually has a CGM, and that number's been increasing pretty consistently. The number of Americans who need a CGM and then therefore have that access to that coverage continues to increase. So it's a growing area. So volume's not the challenge. With competitive bidding, that's a volume opportunity for us. That's just one payer amongst many. We feel that being the largest and the most comprehensive in capability in that space will help the government and will help our other payers be very competitive with, because there's no reason why that business should not continue to grow its volume, which is the type of business that's really good for our at-Home business. It fits that product profile very well. I want to stick on that because I had a really interesting conversation with Cardinal after, believe it was after last call. It was recently. And there were some core points that just hit home for me, which is how you go to market in the direct-to-patient business. You are not walking over the threshold, right? You are not actively- Yes pursuing- That is right. walking into patients' homes, doing setups. You are highly automated. It is mail order. Just hit those bullet points again- Yeah. That is right. because I think people look at your model, and they compare you to a couple of public competitors that maybe even a handful of, if we include the micro caps that frankly have not had the best runs. Yeah. And- It's a fantastic question. Yeah. I love that you teed it up that way, Eric, because it's absolutely core to our strategy, and we probably don't spend enough time telling that. We did an investor day, and so I'll repeat a couple of the key points here. We are very intentional with the types of products that we allow to come into our ecosystem. What those products are relatively small, dense, valuable products. Why does that matter? Because we have incredible scale on small parcel freight. We are one of the largest users of small parcel freight in the industry. Not just in healthcare, but in the industry. Think about our OptiFreight business, which directs a lot of freight, our at-Home Solutions business, which directs a lot of freight. And then we have all of our distribution business that directs freight, usually in more courier basis, but also small parcel. We're an incredible user of this. We have great scale. And we've now built our distribution centers to be focused on that type of product. You've heard me talk about three new distribution centers in the last several years that use the latest in automation technology that are perfect for taking small parcels in an AutoStore type of setup and be very efficient at delivering that into the small parcel channel then. And then we have three more coming in the next several years to further build out our whole footprint there. That connects. Think about the corollary to that is some of these larger, bulkier items. That's that smart growth we've talked about, and why our revenue growth was a little bit lower more recently, is we've prioritized our efforts to that small parcel, deprioritized on some of the larger stuff. Because what we've learned through data and analytics is that our profitability is not very good when you got big, bulky things, and it uses a ton of capacity in our networks, and it doesn't fit in the AutoStore, and these are all things that have been very intentional. What that means, that's all the things that we do. What we don't do is we don't want to go into people's homes. That is a very difficult, different capability. Other people can do that really well. They should focus on that. That has to be a part of the patient journey. But it's not what we do. We are an expert at freight logistics, that type of backbone of the healthcare industry. But when you get into taking care of patients inside of the home, that's a very different model. It's a very different capability set, and it's certainly not what we have at at-Home Solutions. We want to use other tools, other assets, other parts of the business to support anything that would be more patient-facing, like through the MSOs. But even there, it's not inside the home, and that's what many of our, quote-unquote, "competitors" focus on. But that's why this transaction, from our perspective, with AdaptHealth made so much sense, because what they are keeping is all the stuff we don't do. Right? Yeah. That's what they are really good at. That's what their priorities are. That's where they're growing. But what we're taking from them is what we're really good at, and I think why we were the logical buyer for that. That's great. That's really helpful. Let's go to GMPD. Small segment relative to total corporate economics at this point, but in theory, a lot of potential over time. You went through the medical improvement plan years ago. You are showing real momentum in Cardinal Health brand growth, and you are kind of fighting back. At the same time, we have this incredible commodity headwind and the tariff headwind, and now reprieve on the back end of VIPA. It does seem to be the one business that due to exogenous events, things outside of your control, maybe under some definitions is not fully living up to its promise yet. A lot of that is commodities. Commodities, several are hitting new highs. Diesel is hitting a new high as we speak. How much of this can you incrementally offset going into next year? Are we just fighting for another year of getting close to the three-year plan, or maybe inside the low end of it if these commodities stay high, or is there something more that can be done at this point? Yeah. It is a business that has turned around very nicely. When you think about the substantial losses we had just several years ago, we are pleased with the progress this last year. In spite of tariffs, we grew the business. Yeah. I am even normalizing for the tariff refund. Even excluding that refund, we grew the business nicely this last year. We are hundreds of millions of dollars stronger than where we were just several years ago. To your point, Eric, it has been driven by the two key tenets of our growth strategy, growing Cardinal Health brand volume, which is higher volume, higher growth part of our business that we are continuing to invest in. That drives a lot of margin, then it allows us to offset some of those other challenges. If we can manage through those other challenges, then that can be very much the growth driver. As well as then further simplification work. This remains a large global business, and we have, over the years now, reduced by more than 50% the countries in which we operate in. We are de-risking the model. We do have tariffs and commodity costs that more today, more the commodity cost, to your point. We did provide a bit of a sensitivity at our guidance. At that point in time, with those economics, if they stayed at elevated those levels for the remainder of the year, we highlighted that it would be more in the lower end of our guidance range. Still in the range, which for a business that historically had more variability, we feel really good about that level of balance because that is still a nice growth year-over-year from where we were even in 2026, which was a pretty good starting point. More work to be done with the business, but we are really pleased with the progress. Unfortunately, without Aaron here, my cash flow layup has been avoided today. You have done a great job on cash flow. Yeah. I want to really applaud you on that. Is there anything else, we just hit time, is there anything else you want to mention before we walk out the room? You touched all the key topics. I am a reformed CFO, so I can talk about cash flow if you like. Yes, you can. It was a real bright spot for the year. Yeah. When you take last year and then put in the guidance for this year, I know you know this, Eric Coldwell, but we are well on our way to likely exceeding that $10 billion that we laid out at our- I think you are 90% of the way there. We are already 90% of the way there. Yeah. We are going to have to think about that for 2028. We do not have a new number for you today. Clearly, we made more progress than anticipated. Yes. We are going to make sure we are very responsible with that cash flow and invest it in the right ways. That is great. Everyone, please join me in thanking Jason and David. Really good to have you here. Good luck with the rest of the week. Yeah. Thank you, Eric. Thank you.