Cencora, Inc.

What they do

Cencora distributes brand-name, specialty, and generic pharmaceuticals, OTC products, and related services to healthcare providers including hospitals, retail pharmacies, and physician practices. Its International segment provides pharmaceutical wholesale in Europe, global specialty logistics, and life sciences services, with a presence in Canada.

Revenue drivers

• U.S. Healthcare Solutions — Drives the majority of revenue through pharmaceutical distribution to a wide range of providers, including specialty products to health systems and physician practices. Fiscal 2025 revenue growth was 9.3% overall, led by unit growth and specialty products.
• International Healthcare Solutions — Contributes through European wholesale distribution and global specialty logistics. In Q3 FY2026, revenue increased 5.9% year-over-year due to higher sales at the European distribution business.
• GLP-1 class products — Sales of diabetes/weight loss products increased 25.5% in Q3 FY2026 and 19.7% in the nine-month period, but these products carry lower gross margins, impacting overall margin mix.

Recent performance

For the third quarter ended June 30, 2026, revenue was $84.8 billion, up 5.1% year-over-year. GAAP diluted EPS was $3.94, and adjusted diluted EPS was $4.48, up 12.0%. Gross profit rose 24.1% year-over-year, partly due to the OneOncology acquisition and higher LIFO credits. Operating income increased 29.1% to $1.1 billion. The company repurchased $1 billion of shares during the quarter.

Strategy

Cencora is investing in specialty, digital transformation, and talent to strengthen customer support and position for sustainable growth. It completed the acquisition of OneOncology in February 2026 and RCA in January 2025. In a strategic review, it reorganized reporting into U.S. Healthcare Solutions, International Healthcare Solutions, and Other (which includes businesses for which it is exploring strategic alternatives, such as MWI Animal Health, Profarma, U.S. Consulting Services, and parts of PharmaLex). The company emphasizes a pharmaceutical-centric strategy to drive long-term growth.

Risks

• Customer concentration — Walgreens and Boots together accounted for ~25% of fiscal 2025 revenue and ~38% of accounts receivable, and Evernorth Health Services accounted for ~13% of revenue; loss of a key customer could materially hurt results.
• Credit risk from customers and suppliers — Customers purchase on credit, and bankruptcy or insolvency of a significant customer or supplier, especially with large receivable or payable balances, could adversely affect revenue and cash flows.
• Competitive and consolidation pressure — The industry is highly competitive, with consolidation among manufacturers, pharmacies, and insurers reducing negotiating power and potentially causing customer losses.
• Market and credit rating risk — Financial market volatility or a credit rating downgrade could increase borrowing costs, restrict credit access, and negatively affect earnings.

Outlook

Management raised adjusted diluted EPS guidance for fiscal 2026 to a range of $17.75 to $17.95, up from the prior range of $17.70 to $17.90. The company does not provide forward-looking GAAP guidance. It expects continued growth from its core businesses and investments in specialty, digital, and talent as it closes fiscal 2026.