UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED December 31, 2025
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________ TO___________
Commission file number 1-16671
CENCORA, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 23-3079390 | |||||||||||||
| (State or other jurisdiction of | (I.R.S. Employer | |||||||||||||
| incorporation or organization) | Identification No.) | |||||||||||||
| 1 West First Avenue | Conshohocken, | PA | 19428-1800 | |||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
(610) 727-7000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered | |||||||||
| Common stock, par value $0.01 per share | COR | New York Stock Exchange | (NYSE) | ||||||||
| 2.875% Senior Notes due 2028 | COR28 | New York Stock Exchange | (NYSE) | ||||||||
| 3.625% Senior Notes due 2032 | COR32 | New York Stock Exchange | (NYSE) | ||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).
Large accelerated filer ý Accelerated filer o Non-accelerated filer o Smaller reporting company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý
The number of shares of common stock of Cencora, Inc. outstanding as of January 31, 2026 was 194,530,682.
CENCORA, INC.
TABLE OF CONTENTS
| Page No. | |||||
Consolidated Statements of Changes in Stockholders’ Equity for the three months ended December 31, 2025 and 2024 | 7 | ||||
1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements may include, without limitation, statements regarding our financial position, business strategy and the plans and objectives of management for our future operations; future liabilities and other obligations; anticipated trends and prospects in the industries in which our business operates; new products, services and related strategies; and capital allocation, including share repurchases and dividends. These statements may constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Quarterly Report on Form 10-Q, words such as “aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “on track,” “opportunity,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “strive,” “sustain,” “synergy,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
These forward-looking statements reflect management’s current views with respect to future events, subject to uncertainty and changes in circumstances, and are based on assumptions as of the date of this Quarterly Report on Form 10-Q. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained. Factors that could have a material adverse effect on our financial condition, liquidity, results of operations or future prospects or that could cause actual results, performance or achievements to differ materially from our expectations include, but are not limited to:
•our ability to respond to general macroeconomic conditions and geopolitical uncertainties, including changes or uncertainties in U.S. policies, financial market volatility and disruption, inflationary concerns, interest and currency exchange rates, and uncertain economic conditions in the United States and abroad;
•our ability to respond to changes or uncertainty in the policies of countries and regions in which we do business, including with respect to trade policies, tariffs, or other protective measures, which can disrupt our global operations, as well as the operations of our customers and suppliers;
•our ability to respond to changes to customer or supplier mix and payment terms, or to changes to manufacturer pricing;
•the retention of key customer or supplier relationships under less favorable economics or the adverse resolution of any contract or other dispute with customers or suppliers;
•competition and industry consolidation of both customers and suppliers resulting in increasing pressure to reduce prices for our products and services;
•risks associated with our strategic, long-term relationships with Walgreens and Boots UK Ltd. (“Boots”), including with respect to the pharmaceutical distribution agreement and/or the global generic purchasing services arrangement;
•risks that acquisitions of or investments in businesses, including the acquisitions of Retina Consultants of America (“RCA”) and OneOncology, LLC (“OneOncology”) fail to achieve expected or targeted future financial and operating performance and results;
•our ability to manage and complete divestitures;
•our ability to effectively manage our growth;
•our ability to maintain the strength and security of information technology systems;
•any inability or failure by us, our service providers, or third-party business partners to anticipate or detect data or information security breaches or other cyberattacks, including due to the evolution of artificial intelligence (“AI”) or otherwise;
•our ability to manage foreign expansion, including non-compliance with the U.S. Foreign Corrupt Practices Act, anti-bribery laws, economic sanctions and import laws and regulations;
•risks associated with our international operations, including changes to laws and regulations in countries where we do business, financial and other impacts of macroeconomic and geopolitical trends and events, including rising nationalism, the conflict in Ukraine, evolving conditions in the Middle East, and related regional and global ramifications;
•unfavorable trends in brand and generic pharmaceutical pricing, including the rate or frequency of price inflation or deflation;
•changes in the U.S. healthcare and regulatory environment, including changes that could impact vaccine and prescription drug coverage, reimbursement, pricing, distribution, and contracting, as well as other regulatory changes from the Executive Branch, including executive orders, and resulting from the One Big Beautiful Bill Act (“OBBBA”);
•the bankruptcy, insolvency, or other credit failure of a significant supplier or customer;
2
•our ability to comply with increasing governmental regulations regarding the pharmaceutical supply chain;
•continued federal and state government enforcement initiatives to detect and prevent suspicious orders of opioid medications, controlled substance medications, or other medications, and the diversion of such medications;
•uncertainties associated with litigation, including the outcome of any legal or governmental proceedings that may be instituted against us, continued investigation, prosecution or suit by federal and state governmental entities and other parties of alleged violations of laws and regulations regarding opioid medications, controlled substance medications, or other medications, and any related disputes;
•the outcome of any legal or governmental proceedings that may be instituted against us, including material adverse resolution of pending legal proceedings;
•risks generally associated with data privacy regulation and the protection and international transfer of proprietary business information or personal data;
•our ability to protect our reputation;
•our ability to address events outside of our control, such as widespread public health issues, natural disasters, government policy changes, and political events; and
•the impairment of goodwill or other intangible assets resulting in a charge to earnings.
As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. You should not place undue reliance on these forward-looking statements. Unless required by federal securities laws, we assume no obligation to update any of these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made.
3
PART I. FINANCIAL INFORMATION
ITEM I. Financial Statements (Unaudited)
CENCORA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| (in thousands, except share and per share data) | December 31, 2025 | September 30, 2025 | ||||||||||||
| (Unaudited) | ||||||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 1,753,122 | $ | 4,356,138 | ||||||||||
Accounts receivable, less allowances for returns and credit losses: December 31, 2025 - $1,835,167; September 30, 2025 - $1,796,172 | 25,979,920 | 25,225,299 | ||||||||||||
| Inventories | 24,078,494 | 20,492,480 | ||||||||||||
| Right to recover assets | 1,661,822 | 1,625,817 | ||||||||||||
| Prepaid expenses and other | 678,218 | 539,339 | ||||||||||||
| Total current assets | 54,151,576 | 52,239,073 | ||||||||||||
| Property and equipment, net | 2,450,799 | 2,539,076 | ||||||||||||
| Goodwill | 13,730,761 | 13,676,520 | ||||||||||||
| Other intangible assets | 3,678,727 | 3,774,181 | ||||||||||||
| Deferred income taxes | 206,821 | 208,810 | ||||||||||||
| Other assets | 4,142,530 | 4,152,452 | ||||||||||||
| TOTAL ASSETS | $ | 78,361,214 | $ | 76,590,112 | ||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | 56,063,820 | $ | 54,719,761 | ||||||||||
| Accrued expenses and other | 2,726,043 | 2,982,993 | ||||||||||||
| Short-term debt | 342,276 | 117,785 | ||||||||||||
| Total current liabilities | 59,132,139 | 57,820,539 | ||||||||||||
| Long-term debt | 7,579,459 | 7,542,988 | ||||||||||||
| Accrued income taxes | 351,490 | 337,631 | ||||||||||||
| Deferred income taxes | 1,635,670 | 1,620,724 | ||||||||||||
| Accrued litigation liability | 3,868,883 | 3,881,283 | ||||||||||||
| Other liabilities | 3,697,605 | 3,639,862 | ||||||||||||
Commitments and contingencies (Note 9) | ||||||||||||||
| Stockholders’ equity: | ||||||||||||||
Common stock, $0.01 par value - authorized, issued, and outstanding: December 31, 2025 - 600,000,000 shares, 298,273,894 shares, and 194,521,885 shares September 30, 2025 - 600,000,000 shares, 297,401,863 shares, and 193,937,673 shares | 2,983 | 2,974 | ||||||||||||
| Additional paid-in capital | 6,273,322 | 6,204,302 | ||||||||||||
| Retained earnings | 6,967,358 | 6,534,227 | ||||||||||||
| Accumulated other comprehensive loss | (905,078) | (901,378) | ||||||||||||
Treasury stock, at cost: December 31, 2025 - 103,752,009 shares; September 30, 2025 - 103,464,190 shares | (10,430,257) | (10,332,106) | ||||||||||||
| Total Cencora, Inc. stockholders’ equity | 1,908,328 | 1,508,019 | ||||||||||||
| Noncontrolling interests | 187,640 | 239,066 | ||||||||||||
| Total stockholders’ equity | 2,095,968 | 1,747,085 | ||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 78,361,214 | $ | 76,590,112 | ||||||||||
See notes to consolidated financial statements.
4
CENCORA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three months ended December 31, | ||||||||||||||
| (in thousands, except per share data) | 2025 | 2024 | ||||||||||||
| Revenue | $ | 85,932,016 | $ | 81,487,060 | ||||||||||
| Cost of goods sold | 82,859,945 | 78,929,022 | ||||||||||||
| Gross profit | 3,072,071 | 2,558,038 | ||||||||||||
| Operating expenses: | ||||||||||||||
| Distribution, selling, and administrative | 1,795,289 | 1,472,055 | ||||||||||||
| Depreciation | 134,288 | 112,712 | ||||||||||||
| Amortization | 126,113 | 165,780 | ||||||||||||
| Litigation and opioid-related (credit) expenses, net | (86,151) | 16,765 | ||||||||||||
| Acquisition-related deal and integration expenses | 78,419 | 38,712 | ||||||||||||
| Restructuring and other expenses, net | 14,166 | 45,760 | ||||||||||||
| Impairment of assets, including goodwill | 249,498 | — | ||||||||||||
| Operating income | 760,449 | 706,254 | ||||||||||||
| Other (income) loss, net | (20,600) | 57,874 | ||||||||||||
| Interest expense, net | 72,409 | 27,933 | ||||||||||||
| Income before income taxes | 708,640 | 620,447 | ||||||||||||
| Income tax expense | 142,514 | 126,728 | ||||||||||||
| Net income | 566,126 | 493,719 | ||||||||||||
| Net income attributable to noncontrolling interests | (6,479) | (5,119) | ||||||||||||
| Net income attributable to Cencora, Inc. | $ | 559,647 | $ | 488,600 | ||||||||||
| Earnings per share: | ||||||||||||||
| Basic | $ | 2.88 | $ | 2.52 | ||||||||||
| Diluted | $ | 2.87 | $ | 2.50 | ||||||||||
| Weighted average common shares outstanding: | ||||||||||||||
| Basic | 194,219 | 193,758 | ||||||||||||
| Diluted | 195,319 | 195,188 | ||||||||||||
| Cash dividends declared per share of common stock | $ | 0.60 | $ | 0.55 | ||||||||||
See notes to consolidated financial statements.
5
CENCORA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| Three months ended December 31, | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| Net income | $ | 566,126 | $ | 493,719 | ||||||||||
| Other comprehensive loss | ||||||||||||||
| Foreign currency translation adjustments | (6,828) | (424,551) | ||||||||||||
| Other, net | (797) | 3,613 | ||||||||||||
| Total other comprehensive loss | (7,625) | (420,938) | ||||||||||||
| Total comprehensive income | 558,501 | 72,781 | ||||||||||||
| Comprehensive (income) loss attributable to noncontrolling interests | (1,896) | 5,313 | ||||||||||||
| Comprehensive income attributable to Cencora, Inc. | $ | 556,605 | $ | 78,094 | ||||||||||
See notes to consolidated financial statements.
6
CENCORA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
| (in thousands, except per share data) | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||
| September 30, 2025 | $ | 2,974 | $ | 6,204,302 | $ | 6,534,227 | $ | (901,378) | $ | (10,332,106) | $ | 239,066 | $ | 1,747,085 | ||||||||||||||||||||||||||||||
| Net income | — | — | 559,647 | — | — | 6,479 | 566,126 | |||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | (3,042) | — | (4,583) | (7,625) | |||||||||||||||||||||||||||||||||||||
Cash dividends, $0.60 per share | — | — | (126,516) | — | — | — | (126,516) | |||||||||||||||||||||||||||||||||||||
| Exercises of stock options | 1 | 7,597 | — | — | — | — | 7,598 | |||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | 66,054 | — | — | — | — | 66,054 | |||||||||||||||||||||||||||||||||||||
| Employee tax withholdings related to restricted share vesting | — | — | — | — | (98,151) | — | (98,151) | |||||||||||||||||||||||||||||||||||||
| Acquisitions | — | 1,316 | — | (658) | — | (53,322) | (52,664) | |||||||||||||||||||||||||||||||||||||
| Other, net | 8 | (5,947) | — | — | — | — | (5,939) | |||||||||||||||||||||||||||||||||||||
| December 31, 2025 | $ | 2,983 | $ | 6,273,322 | $ | 6,967,358 | $ | (905,078) | $ | (10,430,257) | $ | 187,640 | $ | 2,095,968 | ||||||||||||||||||||||||||||||
| (in thousands, except per share data) | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||
| September 30, 2024 | $ | 2,962 | $ | 6,030,790 | $ | 5,417,139 | $ | (989,118) | $ | (9,815,835) | $ | 140,804 | $ | 786,742 | ||||||||||||||||||||||||||||||
| Net income | — | — | 488,600 | — | — | 5,119 | 493,719 | |||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | (410,506) | — | (10,432) | (420,938) | |||||||||||||||||||||||||||||||||||||
Cash dividends, $0.55 per share | — | — | (110,888) | — | — | — | (110,888) | |||||||||||||||||||||||||||||||||||||
| Exercises of stock options | 1 | 8,107 | — | — | — | — | 8,108 | |||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | 70,384 | — | — | — | — | 70,384 | |||||||||||||||||||||||||||||||||||||
| Purchases of common stock | — | — | — | — | (388,111) | — | (388,111) | |||||||||||||||||||||||||||||||||||||
| Employee tax withholdings related to restricted share vesting | — | — | — | — | (73,963) | — | (73,963) | |||||||||||||||||||||||||||||||||||||
| Other, net | 8 | (2,990) | — | — | — | (169) | (3,151) | |||||||||||||||||||||||||||||||||||||
| December 31, 2024 | $ | 2,971 | $ | 6,106,291 | $ | 5,794,851 | $ | (1,399,624) | $ | (10,277,909) | $ | 135,322 | $ | 361,902 | ||||||||||||||||||||||||||||||
See notes to consolidated financial statements.
7
CENCORA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three months ended December 31, | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| OPERATING ACTIVITIES | ||||||||||||||
| Net income | $ | 566,126 | $ | 493,719 | ||||||||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||||||||
| Depreciation, including amounts charged to cost of goods sold | 135,247 | 113,629 | ||||||||||||
| Amortization, including amounts charged to interest expense | 129,024 | 167,843 | ||||||||||||
| Provision for credit losses | 13 | 3,871 | ||||||||||||
| Provision (benefit) for deferred income taxes | 14,362 | (5,077) | ||||||||||||
| Share-based compensation expense | 66,054 | 70,384 | ||||||||||||
| LIFO credit | (77,562) | (7,324) | ||||||||||||
| Türkiye highly inflationary impact | 8,723 | 7,666 | ||||||||||||
| Impairment of assets, including goodwill | 249,498 | — | ||||||||||||
| Adjustments to RCA equity units | 42,137 | — | ||||||||||||
| Loss on divestiture of businesses | — | 35,539 | ||||||||||||
| Gain on remeasurement of equity investment | (10,501) | (3,480) | ||||||||||||
| Gain on sale of assets | (35,816) | — | ||||||||||||
| Other, net | 6,726 | 7,047 | ||||||||||||
| Changes in operating assets and liabilities, excluding the effects of acquisitions and divestitures: | ||||||||||||||
| Accounts receivable | (830,752) | (974,256) | ||||||||||||
| Inventories | (3,519,839) | (1,655,165) | ||||||||||||
| Prepaid expenses and other assets | (14,386) | 70,310 | ||||||||||||
| Accounts payable | 1,307,868 | (654,165) | ||||||||||||
| Accrued expenses | (328,365) | (338,130) | ||||||||||||
| Income taxes payable and other liabilities | (13,726) | (51,193) | ||||||||||||
| NET CASH USED IN OPERATING ACTIVITIES | (2,305,169) | (2,718,782) | ||||||||||||
| INVESTING ACTIVITIES | ||||||||||||||
| Capital expenditures | (119,376) | (105,893) | ||||||||||||
| Cost of acquired companies, net of cash acquired | (219,686) | (9,015) | ||||||||||||
| Proceeds from sale of assets | 43,057 | — | ||||||||||||
| Cost of equity investments | (10,710) | (182,014) | ||||||||||||
| Non-customer note receivable | — | (34,814) | ||||||||||||
| Other, net | 7,400 | (11,303) | ||||||||||||
| NET CASH USED IN INVESTING ACTIVITIES | (299,315) | (343,039) | ||||||||||||
| FINANCING ACTIVITIES | ||||||||||||||
| Loan and senior notes borrowings | 107,720 | 1,806,028 | ||||||||||||
| Loan repayments | (131,709) | (44,950) | ||||||||||||
| Borrowings under revolving and securitization credit facilities | 23,791,590 | 15,454,257 | ||||||||||||
| Repayments under revolving and securitization credit facilities | (23,501,389) | (13,427,095) | ||||||||||||
| Purchases of common stock | — | (385,471) | ||||||||||||
| Exercises of stock options | 7,598 | 8,108 | ||||||||||||
| Cash dividends on common stock | (126,516) | (110,888) | ||||||||||||
| Employee tax withholdings related to restricted share vesting | (98,151) | (73,963) | ||||||||||||
| Other, net | (5,939) | (16,876) | ||||||||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 43,204 | 3,209,150 | ||||||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (24,576) | (50,235) | ||||||||||||
| (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (2,585,856) | 97,094 | ||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 4,394,549 | 3,297,880 | ||||||||||||
| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD | $ | 1,808,693 | $ | 3,394,974 | ||||||||||
See notes to consolidated financial statements.
8
CENCORA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements present the consolidated financial position, results of operations, and cash flows of Cencora, Inc. and its subsidiaries, including less-than-wholly-owned subsidiaries in which Cencora, Inc. has a controlling financial interest (the “Company”), as of the dates and for the periods indicated. All significant intercompany accounts and transactions have been eliminated in consolidation.
The accompanying unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments (consisting only of normal recurring accruals, except as otherwise disclosed herein) considered necessary to present fairly the financial position as of December 31, 2025 and the results of operations and cash flows for the interim periods ended December 31, 2025 and 2024 have been included. Certain information and disclosures normally included in financial statements presented in accordance with U.S. GAAP, but which are not required for interim reporting purposes, have been omitted. The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual amounts could differ from these estimated amounts. Certain reclassifications have been made to prior-period amounts to conform to the current year presentation.
New Reporting Structure
The Company undertook a strategic review of its business to ensure alignment with its growth priorities and strategic drivers. As a result of this review, beginning in the first quarter of fiscal 2026, the Company reorganized certain business components within its reporting structure. The Company’s revised reporting structure is comprised of U.S. Healthcare Solutions, International Healthcare Solutions, and Other. The U.S. Healthcare Solutions reportable segment consists of U.S. Human Health (excluding legacy U.S. Consulting Services). The International Healthcare Solutions reportable segment consists of Alliance Healthcare, Innomar, World Courier, and strategic components of PharmaLex. Other, which is not considered a reportable segment, consists of businesses for which the Company has begun to explore strategic alternatives and includes MWI Animal Health, Profarma, U.S. Consulting Services, and the other components of PharmaLex. The Company's previously reported segment results have been revised to conform to its re-aligned reporting structure. Refer to Note 5 and Note 12 for the Company's presentation of goodwill and segment results, respectively, under the new reporting structure.
Restricted Cash
The Company is required to maintain certain cash deposits with banks mainly consisting of deposits restricted under contractual agency agreements and cash restricted by law and other obligations.
The following represents a reconciliation of cash and cash equivalents in the Consolidated Balance Sheets to cash, cash equivalents, and restricted cash in the Consolidated Statements of Cash Flows:
| (amounts in thousands) | December 31, 2025 | September 30, 2025 | December 31, 2024 | September 30, 2024 | ||||||||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||||||||||
| Cash and cash equivalents | $ | 1,753,122 | $ | 4,356,138 | $ | 3,224,260 | $ | 3,132,648 | ||||||||||||||||||
| Restricted cash (included in Prepaid Expenses and Other) | 55,571 | 38,411 | 103,252 | 98,596 | ||||||||||||||||||||||
| Restricted cash (included in Other Assets) | — | — | 67,462 | 66,636 | ||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash | $ | 1,808,693 | $ | 4,394,549 | $ | 3,394,974 | $ | 3,297,880 | ||||||||||||||||||
9
Recently Adopted Accounting Pronouncements
As of December 31, 2025, there were no recently-adopted accounting standards that had a material impact on the Company’s financial position, results of operations, cash flows, or notes to the financial statements upon their adoption.
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”).” ASU 2023-09 requires entities to provide additional information in their tax rate reconciliation and additional disclosures about income taxes paid by jurisdiction. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The guidance should be applied prospectively, but entities have the option to apply it retrospectively for each period presented. The Company is evaluating the impact of adopting this new accounting guidance.
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”).” ASU 2024-03 requires disaggregated disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. Expense captions should be disaggregated to include expenses related to purchases of inventory, employee compensation, depreciation, and intangible asset amortization. ASU 2024-03 applies to public entities and is effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The guidance should be applied prospectively with the option for retrospective application. The Company is evaluating the impact of adopting this new accounting guidance.
Note 2. Acquisition
On January 2, 2025, the Company acquired an 85% interest in Retina Consultants of America (“RCA”) for $4,042.0 million in cash, $694.4 million of contingent consideration related to equity units for certain RCA physicians and members of management that retained the remaining 15% interest in RCA, $545.7 million for the settlement of a net receivable resulting from a pre-existing commercial relationship between the Company and RCA, and $393.1 million for contingent consideration payable to the sellers associated with RCA’s achievement of certain predefined business objectives in fiscal 2027 and fiscal 2028. The Company funded the cash purchase price through a combination of cash on hand and new debt financing. The Company believes the acquisition of RCA allows it to broaden its relationships with community providers and to build on its leadership in specialty pharmaceuticals within its U.S. Healthcare Solutions reportable segment.
As part of the acquisition, certain RCA physicians and members of management retained equity in RCA. The Company evaluated the equity unit arrangements to determine if the contingent payments were part of the purchase price or post-acquisition compensation expense, which would be recognized over any future service period. The $694.4 million of contingent consideration for the retained equity units was concluded to be a part of the purchase price and initially recorded at its fair value at the time of the acquisition based on the unit price that the Company paid to acquire RCA times the number of equity units retained by RCA physicians and members of management, and represents a Level 3 fair value measurement. The equity units retained by RCA physicians have an embedded option feature that is a liability classified compensation arrangement and is being expensed ratably over a period of 1.5 years. The fair value of the embedded option feature was determined using a Black-Scholes model that included assumptions for the equity unit value, expected life, and volatility and represents a Level 3 fair value measurement. The Company recognized an expense of $42.1 million related to this embedded option feature and other incentive units granted in connection with the RCA acquisition in Acquisition-Related Deal and Integration Expenses in its Consolidated Statement of Operations for the three months ended December 31, 2025. The Company’s estimated liability related to these equity units was $857.3 million and $815.2 million as of December 31, 2025 and September 30, 2025, respectively, and is recorded in Other Liabilities on the Company’s Consolidated Balance Sheets.
The $393.1 million of contingent consideration represented an initial estimate for RCA’s achievement of certain predefined business objectives in fiscal 2027 and fiscal 2028 and provides for the potential payment to the sellers of up to $500 million in the aggregate. The fair value of this liability was determined based on a weighted probability of the achievement of these objectives and represents a Level 3 fair value measurement. The Company’s estimated liability related to the achievement of these predefined business objectives is $412.6 million as of December 31, 2025 and September 30, 2025 and is recorded in Other Liabilities on the Company’s Consolidated Balance Sheets.
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The Company completed the purchase price allocation as of December 31, 2025. The final purchase price has been allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of the acquisition in the table that follows:
| (in thousands) | ||||||||
| Consideration | ||||||||
| Cash | $ | 4,042,007 | ||||||
| Total estimated contingent consideration | 1,087,450 | |||||||
| Settlement of a net receivable resulting from a pre-existing commercial relationship | 545,738 | |||||||
| Estimated fair value of total consideration | $ | 5,675,195 | ||||||
| Recognized amounts of identifiable assets acquired and liabilities assumed | ||||||||
| Cash and cash equivalents | $ | 143,312 | ||||||
| Accounts receivable | 450,744 | |||||||
| Inventories | 110,564 | |||||||
| Prepaid expenses and other | 12,866 | |||||||
| Property and equipment | 173,098 | |||||||
| Goodwill | 4,780,042 | |||||||
| Other intangible assets | 178,000 | |||||||
| Deferred income taxes | 40,903 | |||||||
| Other assets | 182,307 | |||||||
| Total assets acquired | $ | 6,071,836 | ||||||
| Accounts payable | $ | 72,385 | ||||||
| Accrued expenses and other | 163,499 | |||||||
| Accrued income taxes | 4,258 | |||||||
| Other liabilities | 156,164 | |||||||
| Total liabilities assumed | $ | 396,306 | ||||||
| Net assets acquired | $ | 5,675,530 | ||||||
| Total estimated contingent consideration | (1,087,450) | |||||||
| Settlement of a net receivable resulting from a pre-existing commercial relationship | (545,738) | |||||||
| Noncontrolling interest | (335) | |||||||
| Total cash paid | 4,042,007 | |||||||
| Cash acquired | (143,312) | |||||||
| Net cash paid | $ | 3,898,695 | ||||||
The estimated fair value of the trade name acquired is $178.0 million and the estimated useful life is 15 years.
Goodwill reflects the intangible assets that do not qualify for separate recognition. Approximately $1,071 million of goodwill resulting from this acquisition is expected to be deductible for income tax purposes.
The Company incurred $65.1 million of acquisition-related costs in connection with this acquisition. These costs were recognized in Acquisition-Related Deal and Integration Expenses in the Company’s Consolidated Statements of Operations in the fiscal year ended September 30, 2025.
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Note 3. Variable Interest Entity
The Company has substantial governance rights over Profarma Distribuidora de Produtos Farmacêuticos S.A. (“Profarma”) that allow it to direct the activities that significantly impact Profarma’s economic performance. As such, the Company consolidates the operating results of Profarma in its consolidated financial statements. The Company is not obligated to provide future financial support to Profarma.
The following assets and liabilities of Profarma are included in the Company’s Consolidated Balance Sheets:
| (in thousands) | December 31, 2025 | September 30, 2025 | ||||||||||||
| Cash and cash equivalents | $ | 27,155 | $ | 70,796 | ||||||||||
| Accounts receivables, net | 304,158 | 260,759 | ||||||||||||
| Inventories | 313,575 | 303,480 | ||||||||||||
| Prepaid expenses and other | 54,438 | 55,981 | ||||||||||||
| Property and equipment, net | 69,570 | 65,410 | ||||||||||||
| Other intangible assets | 53,126 | 53,861 | ||||||||||||
| Other long-term assets | 96,671 | 99,519 | ||||||||||||
| Total assets | $ | 918,693 | $ | 909,806 | ||||||||||
| Accounts payable | $ | 400,242 | $ | 349,876 | ||||||||||
| Accrued expenses and other | 77,819 | 71,383 | ||||||||||||
| Short-term debt | 51,769 | 116,361 | ||||||||||||
| Long-term debt | 98,772 | 65,390 | ||||||||||||
| Deferred income taxes | 11,386 | 11,986 | ||||||||||||
| Other long-term liabilities | 72,331 | 75,132 | ||||||||||||
| Total liabilities | $ | 712,319 | $ | 690,128 | ||||||||||
Profarma’s assets can only be used to settle its obligations, and its creditors do not have recourse to the general credit of the Company.
Note 4. Income Taxes
The Company files income tax returns in U.S. federal, state, and various foreign jurisdictions. As of December 31, 2025, the Company had unrecognized tax benefits, defined as the aggregate tax effect of differences between tax return positions and the benefits recognized in the Company’s financial statements, of $650.1 million ($594.0 million, net of federal benefit). If recognized, $584.1 million of these tax benefits would have reduced income tax expense and the effective tax rate. Included in this amount is $74.0 million of interest and penalties, which the Company records in Income Tax Expense in its Consolidated Statements of Operations. In the three months ended December 31, 2025, unrecognized tax benefits increased by $9.6 million.
The Company’s effective tax rates were 20.1% and 20.4% for the three months ended December 31, 2025 and 2024, respectively. The effective tax rates for the three months ended December 31, 2025 and 2024 were lower than the U.S. statutory rate primarily due to the benefit of income taxed at rates lower than the U.S. statutory rate and tax benefits associated with equity compensation, offset in part by U.S. state income taxes.
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Note 5. Goodwill and Other Intangible Assets
In connection with the change in the Company's reporting structure described in Note 1, the Company reallocated goodwill from the U.S. Healthcare Solutions reportable segment to Other based on the reporting units that were transferred. The following is a summary of the changes in the carrying value of goodwill, by reportable segment, for the three months ended December 31, 2025:
| (in thousands) | U. S. Healthcare Solutions | International Healthcare Solutions | Other | Total | ||||||||||||||||||||||
| Goodwill as of September 30, 2025 | $ | 11,104,990 | $ | 2,571,530 | $ | — | $ | 13,676,520 | ||||||||||||||||||
| Reallocated goodwill | (1,421,428) | — | 1,421,428 | — | ||||||||||||||||||||||
| Goodwill recognized in connection with acquisitions | 140,945 | 72,617 | — | 213,562 | ||||||||||||||||||||||
| Purchase accounting adjustments | 1,988 | — | — | 1,988 | ||||||||||||||||||||||
| Goodwill impairment | — | — | (165,665) | (165,665) | ||||||||||||||||||||||
| Foreign currency translation | — | 4,084 | 272 | 4,356 | ||||||||||||||||||||||
| Goodwill as of December 31, 2025 | $ | 9,826,495 | $ | 2,648,231 | $ | 1,256,035 | $ | 13,730,761 | ||||||||||||||||||
The Company recorded a goodwill impairment of $165.7 million related to its U.S. Consulting Services business that was classified as held for sale as of December 31, 2025.
The following is a summary of other intangible assets:
| December 31, 2025 | September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Weighted Average Remaining Useful Life | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||||||||||||||||
| Indefinite-lived trade names | $ | 17,000 | $ | — | $ | 17,000 | $ | 17,000 | $ | — | $ | 17,000 | ||||||||||||||||||||||||||||||||
| Finite-lived: | ||||||||||||||||||||||||||||||||||||||||||||
| Customer relationships | 12 years | 5,232,445 | (1,903,803) | 3,328,642 | 5,250,912 | (1,860,484) | 3,390,428 | |||||||||||||||||||||||||||||||||||||
| Trade names and other | 12 years | 1,473,344 | (1,140,259) | 333,085 | 1,457,176 | (1,090,423) | 366,753 | |||||||||||||||||||||||||||||||||||||
| Total other intangible assets | $ | 6,722,789 | $ | (3,044,062) | $ | 3,678,727 | $ | 6,725,088 | $ | (2,950,907) | $ | 3,774,181 | ||||||||||||||||||||||||||||||||
Amortization expense for finite-lived intangible assets was $126.1 million and $165.8 million in the three months ended December 31, 2025 and 2024, respectively. Amortization expense for finite-lived intangible assets is estimated to be $399.8 million in fiscal 2026, $344.0 million in fiscal 2027, $332.2 million in fiscal 2028, $317.3 million in fiscal 2029, $296.0 million in fiscal 2030, and $2,098.5 million thereafter.
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Note 6. Debt
Debt consisted of the following:
| (in thousands) | December 31, 2025 | September 30, 2025 | ||||||||||||
| Multi-currency revolving credit facility due in 2030 | $ | 220,000 | $ | — | ||||||||||
| Receivables securitization facility due in 2028 | — | — | ||||||||||||
| Term loan due in 2027 | 799,177 | 799,043 | ||||||||||||
| Money market facility due in 2027 | — | — | ||||||||||||
| Working capital credit facility due in 2026 | — | — | ||||||||||||
$750,000, 3.450% senior notes due 2027 | 748,360 | 748,150 | ||||||||||||
$500,000, 4.625% senior notes due 2027 | 497,615 | 497,309 | ||||||||||||
€500,000, 2.875% senior notes due 2028 | 584,652 | 583,903 | ||||||||||||
$600,000, 4.850% senior notes due 2029 | 596,804 | 596,603 | ||||||||||||
$500,000, 2.800% senior notes due 2030 | 497,327 | 497,174 | ||||||||||||
$1,000,000, 2.700% senior notes due 2031 | 994,118 | 993,838 | ||||||||||||
€500,000, 3.625% senior notes due 2032 | 582,335 | 581,685 | ||||||||||||
$500,000, 5.125% senior notes due 2034 | 495,251 | 495,104 | ||||||||||||
$700,000, 5.150% senior notes due 2035 | 695,048 | 694,909 | ||||||||||||
$500,000, 4.250% senior notes due 2045 | 495,846 | 495,792 | ||||||||||||
$500,000, 4.300% senior notes due 2047 | 494,154 | 494,088 | ||||||||||||
| Alliance Healthcare debt | 70,507 | 1,424 | ||||||||||||
| Nonrecourse debt | 150,541 | 181,751 | ||||||||||||
| Total debt | 7,921,735 | 7,660,773 | ||||||||||||
| Less borrowings outstanding under the multi-currency revolving credit facility | 220,000 | — | ||||||||||||
| Less Alliance Healthcare current portion | 70,507 | 1,424 | ||||||||||||
| Less nonrecourse current portion | 51,769 | 116,361 | ||||||||||||
| Long-term debt | $ | 7,579,459 | $ | 7,542,988 | ||||||||||
Multi-Currency Revolving Credit Facility and Commercial Paper Program
The Company had a $4.5 billion multi-currency senior unsecured revolving credit facility (“Multi-Currency Revolving Credit Facility”) with a syndicate of lenders. In January 2026, the Company amended and restated the Multi-Currency Revolving Credit Facility to increase the aggregate amount of the commitments under this facility to $5.5 billion. The Multi-Currency Revolving Credit Facility is scheduled to expire in June 2030. Interest on borrowings under the Multi-Currency Revolving Credit Facility accrues at specified rates based upon the Company’s debt rating. The Company pays facility fees to maintain the availability under the Multi-Currency Revolving Credit Facility at specified rates based on its debt rating. The Company may choose to repay or reduce its commitments under the Multi-Currency Revolving Credit Facility at any time. The Multi-Currency Revolving Credit Facility contains covenants, including compliance with a financial leverage ratio test, as well as others that impose limitations on, among other things, indebtedness of subsidiaries and asset sales, with which the Company was compliant as of December 31, 2025.
The Company has a $4.5 billion commercial paper program. The commercial paper program does not increase the Company’s borrowing capacity, and it is fully backed by its Multi-Currency Revolving Credit Facility. The Company may, from time to time, issue short-term promissory notes in an aggregate amount of up to $4.5 billion at any one time. Amounts available under the program may be borrowed, repaid, and re-borrowed from time to time. The maturities on the notes will vary but may not exceed 365 days from the date of issuance. The notes will bear interest, if interest bearing, or will be sold at a discount from their face amounts. There were $220.0 million of borrowings outstanding under the commercial paper program as of December 31, 2025 and none outstanding as of September 30, 2025.
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Receivables Securitization Facility
The Company has a $1.5 billion receivables securitization facility (“Receivables Securitization Facility”), which is scheduled to expire in June 2028. The Receivables Securitization Facility has an accordion feature that allows the Company to increase the commitment on the Receivables Securitization Facility by up to $500 million, subject to lender approval. Interest rates are based on prevailing market rates for short-term commercial paper or 30-day Term SOFR, plus a program fee. The Company pays a customary unused fee at prevailing market rates, monthly, to maintain the availability under the Receivables Securitization Facility. The Receivables Securitization Facility contains similar covenants to the Multi-Currency Revolving Credit Facility, with which the Company was compliant as of December 31, 2025. There were no borrowings outstanding under the Receivables Securitization Facility as of December 31, 2025 and September 30, 2025.
In connection with the Receivables Securitization Facility, AmerisourceBergen Drug Corporation and a specialty distribution subsidiary sell on a revolving basis certain accounts receivable to Amerisource Receivables Financial Corporation, a wholly-owned special purpose entity, which in turn sells a percentage ownership interest in the receivables to financial institutions and commercial paper conduits sponsored by financial institutions. AmerisourceBergen Drug Corporation is the servicer of the accounts receivable under the Receivables Securitization Facility. As sold receivables are collected, additional receivables may be sold up to the maximum amount available under the facility. The Company uses the facility as a financing vehicle because it generally offers an attractive interest rate relative to other financing sources. The Company securitizes its trade accounts, which are generally non-interest bearing, in transactions that are accounted for as borrowings.
Money Market Facility
The Company has an uncommitted, unsecured line of credit available to it pursuant to a money market credit agreement (the “Money Market Facility”) that allows the Company to request short-term unsecured revolving credit loans in a principal amount not to exceed $500 million on or after April 1 and before December 1 of any year and increases to $750 million on or after December 1 and before March 31 of any year. The Money Market Facility may be decreased or terminated by the bank or the Company at any time without prior notice. There were no borrowings outstanding under the Money Market Facility as of December 31, 2025 and September 30, 2025.
Working Capital Credit Facility
The Company has an uncommitted, unsecured line of credit to support its working capital needs (“Working Capital Credit Facility”). The Working Capital Credit Facility provides the Company with the ability to request short-term, unsecured revolving credit loans from time to time in a principal amount not to exceed $500 million. The Working Capital Credit Facility expires in July 2026 and may be decreased or terminated by the bank or the Company at any time without prior notice. There were no borrowings outstanding under the Working Capital Credit Facility as of December 31, 2025 and September 30, 2025.
Multi-Year Term Loan Facility
In January 2026, the Company entered into an agreement pursuant to which it obtained a $1.5 billion delayed draw senior unsecured term loan facility (“Multi-Year Term Loan Facility”) with a syndicate of lenders consisting of a $500 million tranche (“Tranche One”) and a $1.0 billion tranche (“Tranche Two”). Tranche One and Tranche Two mature two years and three years, respectively, from February 2, 2026, the date on which it was drawn. The Multi-Year Term Loan Facility was used to finance a portion of the acquisition of OneOncology (see Note 13).
The Multi-Year Term Loan Facility will bear interest at a rate equal to either a Term SOFR rate or a Daily Simple SOFR rate, plus an applicable margin, or an alternate base rate, plus an applicable margin, in each case based on the Company’s public debt ratings. The Company has also agreed to pay a fee that will, commencing on April 1, 2026, accrue at specified rates based on the Company’s public debt ratings, on the daily amount of unused commitments under the Multi-Year Term Loan Facility. The Company has the right to prepay borrowings under the Multi-Year Term Loan Facility at any time, in whole or in part and without premium or penalty. The Company may also choose to reduce its commitments under the Multi-Year Term Credit Facility at any time.
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364-Day Term Loan Facility
In January 2026, the Company entered into an agreement pursuant to which it obtained a $3.0 billion delayed draw senior unsecured term loan facility (the “364-Day Term Loan Facility”) with a syndicate of lenders, which matures 364 days from February 2, 2026, the date on which it was drawn. The 364-Day Term Loan Facility was used to finance a portion of the acquisition of OneOncology.
Interest on borrowings under the 364-Day Term Loan Facility will accrue at a rate equal to either a Term SOFR or a Daily Simple SOFR, plus an applicable margin or an alternate base rate plus an applicable margin, in each case based on the Company’s public debt ratings. The Company has also agreed to pay a fee that will, commencing on April 1, 2026, accrue at specified rates based on the Company’s public debt ratings, on the daily amount of unused commitments under the 364-Day Term Loan Facility. The Company has also agreed to pay a duration fee on the outstanding commitment amount as of May 29, 2026 under the 364-Day Term Loan Facility. The Company also has the right to prepay borrowings under the 364-Day Term Loan Facility at any time, in whole or in part and without premium or penalty.
Alliance Healthcare Debt
Alliance Healthcare debt is comprised of uncommitted revolving credit facilities in various currencies with various rates. A vast majority of the outstanding borrowings as of December 31, 2025 were held in Türkiye. These facilities are used to fund its working capital needs.
Nonrecourse Debt
Nonrecourse debt is comprised of short-term and long-term debt belonging to the Brazil subsidiaries and is repaid solely from the Brazil subsidiaries’ cash flows and such debt agreements provide that the repayment of the loans (and interest thereon) is secured solely by the capital stock, physical assets, contracts, and cash flows of the Brazil subsidiaries.
Note 7. Stockholders’ Equity and Earnings per Share
In March 2024, the Company’s Board of Directors authorized a share repurchase program allowing the Company to purchase up to $2.0 billion of its outstanding shares of common stock, subject to market conditions. In the three months ended December 31, 2025, the Company did not purchase any shares of its common stock. As of December 31, 2025, the Company had $882.2 million of availability under this program.
Basic earnings per share is computed by dividing net income attributable to Cencora, Inc. by the weighted average number of shares of common stock outstanding during the periods presented. Diluted earnings per share is computed by dividing net income attributable to Cencora, Inc. by the weighted average number of shares of common stock outstanding, plus the dilutive effect of restricted stock units and stock options during the periods presented.
The following illustrates the components of diluted weighted average shares outstanding for the periods indicated:
| Three months ended December 31, | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| Weighted average common shares outstanding - basic | 194,219 | 193,758 | ||||||||||||
| Dilutive effect of restricted stock units and stock options | 1,100 | 1,430 | ||||||||||||
| Weighted average common shares outstanding - diluted | 195,319 | 195,188 | ||||||||||||
The potentially dilutive restricted stock units that were antidilutive for the three months ended December 31, 2025 and 2024 were 183 thousand and 272 thousand, respectively.
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Note 8. Restructuring and Other Expenses, Net
The following illustrates expenses incurred by the Company relating to Restructuring and Other Expenses, Net for the periods indicated:
| Three months ended December 31, | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| Restructuring and employee severance costs, net | $ | 3,678 | $ | 19,555 | ||||||||||
| Business transformation efforts | 10,126 | 25,074 | ||||||||||||
| Other, net | 362 | 1,131 | ||||||||||||
| Total restructuring and other expenses, net | $ | 14,166 | $ | 45,760 | ||||||||||
Restructuring and employee severance costs, net in the three months ended December 31, 2025 primarily included costs associated with workforce reductions, offset in part by a gain on the sale of a facility. Restructuring and employee severance costs, net in the three months ended December 31, 2024 primarily included costs associated with workforce reductions.
Business transformation efforts in the three months ended December 31, 2025 and 2024 included non-recurring expenses related to significant strategic initiatives to improve operational efficiency, including certain technology initiatives. Business transformation efforts in the three months ended December 31, 2024 also included rebranding costs associated with the Company’s name change to Cencora. The majority of these costs are related to services provided by third-party consultants.
Note 9. Legal Matters and Contingencies
In the ordinary course of its business, the Company becomes involved in lawsuits, administrative proceedings, government subpoenas, government investigations, stockholder demands, and other disputes, including antitrust, commercial, data privacy and security, employment discrimination, intellectual property, product liability, regulatory, and other matters. Significant damages or penalties may be sought from the Company in some matters, and some matters may require years for the Company to resolve. The Company records a reserve for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
For those matters for which the Company has not recognized a liability, the Company cannot predict the outcome of their impact on the Company as uncertainty remains, including with regard to whether such matters will proceed to trial, whether settlements will be reached, and the amount and terms of any such settlements. Outcomes may include settlements in significant amounts that are not currently estimable, limitations on the Company’s conduct, the imposition of corporate integrity agreement obligations, consent decrees, and/or other civil and criminal penalties. From time to time, the Company is also involved in disputes with its customers, which the Company generally seeks to resolve through commercial negotiations. If negotiations are unsuccessful, the parties may litigate the dispute or otherwise attempt to settle the matter.
With respect to the specific legal proceedings and claims described below, unless otherwise noted, the amount or range of possible losses is not reasonably estimable. There can be no assurance that the settlement, resolution, or other outcome of one or more matters, including the matters set forth below, during any subsequent reporting period will not have a material adverse effect on the Company’s results of operations or cash flows for that period or on the Company’s financial condition.
Opioid Lawsuits and Investigations
A significant number of counties, municipalities, and other governmental entities in a majority of U.S. states and Puerto Rico, as well as numerous states and tribes, filed lawsuits in various federal, state and other courts against pharmaceutical wholesale distributors (including the Company and certain subsidiaries, such as AmerisourceBergen Drug Corporation (“ABDC”) and H.D. Smith, LLC (“H.D. Smith”)), pharmaceutical manufacturers, retail pharmacy chains, medical practices, and physicians relating to the distribution of prescription opioid pain medications.
Starting in December 2017, more than 2,000 cases were transferred to Multidistrict Litigation (“MDL”) proceedings before the United States District Court for the Northern District of Ohio (the “MDL Court”). Since then, several cases filed by government and tribal plaintiffs that were selected as bellwether cases in the MDL have been resolved through trial or settlement. Following trial in two consolidated cases in the United States District Court for the Southern District of West Virginia (the “West Virginia District Court”), the West Virginia District Court entered judgment in favor of the defendants, including the Company. The plaintiffs filed an appeal of the West Virginia District Court’s decision in the United States Court of Appeals for the Fourth Circuit (the “Fourth Circuit”) on August 2, 2022. On October 28, 2025, the Fourth Circuit issued its opinion in the case, vacated the West Virginia District Court’s judgment, and remanded the case back to the West Virginia
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District Court for further proceedings consistent with the Fourth Circuit’s opinion. The West Virginia District Court directed the parties to submit additional briefing and scheduled a hearing for March 24, 2026.
On July 21, 2021, the Company announced that it and the two other national pharmaceutical distributors had negotiated a Distributor Settlement Agreement that, if all conditions were satisfied, would result in the resolution of a substantial majority of opioid lawsuits filed by state and local governmental entities. The Distributor Settlement Agreement became effective on April 2, 2022, and as of December 31, 2025, it included 48 of 49 eligible states (the “Settling States”) as well as 99% by population of the eligible political subdivisions in the Settling States. The Distributor Settlement Agreement requires the Company to comply with certain requirements, including the establishment of a clearinghouse that will consolidate data from all three national pharmaceutical distributors. The States of Alabama and West Virginia and their subdivisions and Native American tribes are not a part of the Distributor Settlement Agreement, and the Company has reached separate agreements with those groups.
In Maryland, a trial commenced on September 16, 2024 in a case filed by the Mayor and City Council of Baltimore in the Circuit Court for Baltimore City (the “Baltimore Circuit Court”). On November 12, 2024, the jury returned a verdict finding ABDC (and another national distributor) liable for public nuisance and assessing approximately $274 million total in compensatory damages, approximately $74 million of which was assessed against ABDC. A second phase of the trial began on December 11, 2024 related to the City of Baltimore’s request for an abatement remedy and proceeded as a bench trial. On June 12, 2025, the Baltimore Circuit Court issued a ruling on the defendants’ post-trial motions relating to the first phase of the trial. The Circuit Court upheld the jury’s finding of liability but granted the defendants a new trial on the extent of damages to correct certain errors and due to the excessive nature of the jury’s damages award. In the alternative, the Baltimore Circuit Court granted remittitur, through which the Baltimore Circuit Court reduced the compensatory damages assessed against ABDC to approximately $14.4 million. The Baltimore Circuit Court issued its ruling regarding the City of Baltimore’s request for abatement on August 8, 2025, assessing approximately $28 million against ABDC for abatement measures, bringing the overall monetary award assessed against ABDC to approximately $42.4 million. On August 14, 2025, the City of Baltimore informed the Baltimore Circuit Court that it would accept the reduced damages award as reflected in the Baltimore Circuit Court’s post-trial ruling, in lieu of a new trial. On September 2, 2025, the Baltimore Circuit Court entered final judgment. In October 2025, ABDC (and the other national distributor) filed a notice of appeal to the Appellate Court of Maryland (the “Maryland Appellate Court”), and the City of Baltimore filed a notice of cross-appeal. In November 2025, both the City of Baltimore and ABDC (and the other national distributor) filed petitions for a writ of certiorari (bypass) with the Supreme Court of Maryland. If the Supreme Court of Maryland grants the petitions, then the appeal will proceed directly in the Supreme Court of Maryland, instead of in the Maryland Appellate Court. The $42.4 million is a component of the Company’s $4.3 billion litigation liability as of December 31, 2025, as described below.
The Company’s accrued litigation liability related to the Distributor Settlement Agreement, including the State of Alabama and an estimate for non-participating government subdivisions (with whom the Company has not reached a settlement agreement), as well as other opioid-related litigation for which it has reached settlement agreements, as described above, was $4.3 billion as of December 31, 2025 and September 30, 2025. The $4.3 billion liability will be paid over 13 years. The Company currently estimates that $426.2 million will be paid prior to December 31, 2026, which is recorded in Accrued Expenses and Other on the Company’s Consolidated Balance Sheet. The remaining long-term liability of $3.9 billion is recorded in Accrued Litigation Liability on the Company’s Consolidated Balance Sheet. While the Company has accrued its estimated liability for opioid litigation, it is unable to estimate the range of possible loss associated with the matters that are not included in the accrual. Because loss contingencies are inherently unpredictable and unfavorable developments or resolutions can occur, the assessment is highly subjective and requires judgments about future events. The Company regularly reviews opioid litigation matters to determine whether its accrual is adequate. The amount of ultimate loss may differ materially from the amount accrued to date. Until such time as otherwise resolved, the Company will continue to litigate and prepare for trial and to vigorously defend itself in all such matters. Since these matters are still developing, the Company is unable to predict the outcome, but the result of these lawsuits could include excessive monetary verdicts and/or injunctive relief that may affect the Company’s operations. Additional lawsuits regarding the distribution of prescription opioid pain medications have been filed and may continue to be filed by a variety of types of plaintiffs, including lawsuits filed by non-governmental or non-political entities and individuals, among others. The Company is vigorously defending itself in the pending lawsuits and intends to vigorously defend itself against any threatened lawsuits or enforcement proceedings.
Since July 2017, the Company has received subpoenas from several U.S. Attorney’s Offices, including grand jury subpoenas from the U.S. Attorney’s Office for the District of New Jersey (“USAO-NJ”) and the U.S. Attorney’s Office for the Eastern District of New York (“USAO-EDNY”). Those subpoenas requested the production of a broad range of documents pertaining to the Company’s distribution of controlled substances through its various subsidiaries, including ABDC, and its diversion control programs. The Company produced documents in response to the subpoenas and engaged in discussions with the various U.S. Attorney’s Offices, including the Health Care and Government Fraud Unit of the Criminal Division of the USAO-NJ, the U.S. Department of Justice Consumer Protection Branch and the U.S. Drug Enforcement Administration, in an
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attempt to resolve these matters. On December 29, 2022, the Department of Justice filed a civil complaint (the “Complaint”) against the Company, ABDC, and Integrated Commercialization Services, LLC (“ICS”), a subsidiary of the Company, alleging violations of the Controlled Substances Act. Specifically, the Complaint alleges that the Company negligently failed to report suspicious orders to the Drug Enforcement Administration. In the Complaint, the Department of Justice seeks civil penalties and injunctive relief. This Complaint relates to the aforementioned and previously-disclosed investigations. On March 30, 2023, the Company filed a motion to dismiss the Complaint in its entirety on behalf of itself, ABDC, and ICS. On November 6, 2023, the United States District Court for the Eastern District of Pennsylvania (the “Pennsylvania District Court”) granted in part and denied in part the motion, dismissing with prejudice all claims for civil penalties for Defendants’ alleged violations of the suspicious order reporting requirement prior to October 24, 2018, but otherwise denying the motion. On December 18, 2023, the Company, ABDC and ICS filed an Answer and Affirmative Defenses to the Complaint. On January 23, 2026, the Pennsylvania District Court entered a Second Amended Scheduling Order setting the fact discovery deadline as August 12, 2026 and the expert discovery deadline as March 15, 2027. The Company denies the allegations in the Complaint and intends to defend itself vigorously in the litigation.
Shareholder Securities Litigation
On December 30, 2021, the Lebanon County Employees’ Retirement Fund and Teamsters Local 443 Health Services & Insurance Plan filed a complaint for a purported derivative action in the Delaware Court of Chancery against the Company and certain of its current officers and directors. The complaint alleges claims for breach of fiduciary duty allegedly arising from the Board’s and certain officers’ oversight of the Company’s controlled substance diversion control programs. The defendants moved to dismiss the complaint on March 29, 2022. On December 22, 2022, the Delaware Court of Chancery granted the motion to dismiss. On January 9, 2023, the Plaintiffs filed a Motion for Relief from Judgment and Order Pursuant to Rule 60(b) from the Delaware Chancery Court’s judgment. On January 20, 2023, the Plaintiffs also appealed the ruling to the Delaware Supreme Court. On March 21, 2023, the Delaware Court of Chancery denied the Plaintiffs’ Motion for Relief from Judgment and Order Pursuant to Rule 60(b). On December 18, 2023, the Delaware Supreme Court reversed the dismissal and remanded the case to the Delaware Court of Chancery for further proceedings. On January 12, 2024, the Company’s Board of Directors established a Special Litigation Committee (the “SLC”) and delegated to the SLC the Board’s full authority with respect to the litigation. On March 4, 2024, the Delaware Court of Chancery granted the SLC’s consented-to motion to stay the action pending its investigation of the allegations of the complaint. On July 28, 2025, the SLC notified the Delaware Court of Chancery that the parties had reached an agreement in principle to settle all claims in the action and filed a stipulation to stay the action pending the presentation of a stipulation of settlement for the Delaware Court of Chancery’s approval. The Delaware Court of Chancery granted the stay on July 29, 2025. The parties filed a stipulation of settlement with the Delaware Court of Chancery on August 15, 2025, and the Delaware Court of Chancery held a fairness hearing on November 13, 2025. During the fairness hearing, the Delaware Court of Chancery approved the settlement and dismissed the action with prejudice. The judgment became final on December 15, 2025. Pursuant to the settlement, on December 30, 2025, insurance carriers paid the Company $86.8 million (consisting of the $111.3 million settlement award, net of fees and expenses awarded by the court to plaintiffs’ counsel), which the Company recorded as a credit in Litigation and Opioid-Related (Credit) Expenses, Net in its Consolidated Statement of Operations for the three months ended December 31, 2025.
Subpoenas, Ongoing Investigations, and Other Contingencies
From time to time, the Company receives subpoenas or requests for information from various government agencies relating to the Company’s business or to the business of a customer, supplier, or other industry participant. The Company’s responses often require time and effort and can result in considerable costs being incurred. Most of these matters are resolved without incident; however, such subpoenas or requests can lead to the assertion of claims or the commencement of civil or criminal legal proceedings against the Company and other members of the healthcare industry, as well as to substantial settlements.
In January 2017, U.S. Bioservices Corporation, a former subsidiary of the Company, received a subpoena for information from the USAO-EDNY relating to its activities in connection with billing for products and making returns of potential overpayments to government payers. A filed qui tam complaint related to the investigation was unsealed in April 2019 and the relator filed an amended complaint under seal in the U.S. District Court for the Eastern District of New York (the “New York District Court”). In December 2019, the government filed a notice that it was declining to intervene. The New York District Court ordered that the relator’s complaint against the Company and other defendants, including AmerisourceBergen Specialty Group, LLC, be unsealed. The relator’s complaint alleged violations of the federal False Claims Act and the false claims acts of various states. The relator filed a second amended complaint, removing one state false claims act count. The Company filed a motion to dismiss the second amended complaint and all briefs on the motion were filed with the New York District Court on October 9, 2020. The motion to dismiss was granted on December 22, 2022. The False Claims Act claims were dismissed with prejudice, and the state claims were dismissed without prejudice. On January 24, 2023, the relator filed Motions to Reconsider Dismissal and For Leave to Amend the Complaint. Response briefs on those motions were filed by the
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Company and all briefing was completed on February 15, 2023. On October 17, 2025, the New York District Court denied the relator’s motions. On November 13, 2025, the relator filed a notice of appeal of such denial to the United States Court of Appeals for the Second Circuit (the “Second Circuit”). Pursuant to a scheduling order issued by the Second Circuit, the relator filed its appellant’s brief on January 12, 2026 and the Company’s appellee brief is due to be filed on February 17, 2026.
On March 3, 2022, the United States Attorney’s Office for the Western District of Virginia notified the Company of the existence of a criminal investigation into MWI Veterinary Supply Co. (“MWI”), the Company’s animal health subsidiary, in connection with grand jury subpoenas to which MWI previously responded relating to compliance with state and federal regulatory requirements governing wholesale shipments of animal health products to customers. In October 2024, the Company reached an agreement in principle to resolve these claims. While no agreement has been finalized, pursuant to the agreement in principle the Company recorded a $49.1 million litigation expense accrual in Litigation and Opioid-Related Expenses (Credit), Net in its fiscal 2024 Consolidated Statement of Operations. This liability is included in Accrued Expenses and Other on the Company’s Consolidated Balance Sheet as of December 31, 2025.
Note 10. Antitrust Settlements
Numerous lawsuits have been filed against certain brand pharmaceutical manufacturers alleging that the manufacturer, by itself or in concert with others, took improper actions to delay or prevent generic drugs from entering the market. These lawsuits are generally brought as class actions. The Company has not been named as a plaintiff in these lawsuits but has been a member of the direct purchasers’ class (i.e., those purchasers who purchase directly from these pharmaceutical manufacturers). None of the lawsuits has gone to trial but some have settled in the past with the Company receiving proceeds from the settlement funds. The Company recognized gains related to these lawsuits of $12.2 million and $22.9 million in the three months ended December 31, 2025 and 2024, respectively. These gains, which are net of attorney fees and estimated payments due to other parties, were recorded as reductions to cost of goods sold in the Company’s Consolidated Statements of Operations.
Note 11. Fair Value of Financial Instruments
The recorded amounts of the Company’s cash and cash equivalents, accounts receivable, and accounts payable as of December 31, 2025 and September 30, 2025 approximate fair value based upon the relatively short-term nature of these financial instruments. Within Cash and Cash Equivalents, the Company had no investments in money market accounts as of December 31, 2025 and had $1,864.0 million of investments in money market accounts as of September 30, 2025. The fair value of the money market accounts was determined based upon unadjusted quoted prices in active markets for identical assets, otherwise known as Level 1 inputs.
The recorded amount of long-term debt (see Note 6) and the corresponding fair value as of December 31, 2025 were $7,579.5 million and $7,406.4 million, respectively. The recorded amount of long-term debt and the corresponding fair value as of September 30, 2025 were $7,543.0 million and $7,361.4 million, respectively. The fair value of long-term debt was determined based upon inputs other than quoted prices, otherwise known as Level 2 inputs.
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Note 12. Business Segment Information
The Company is organized geographically based upon the products and services it provides to its customers and reports its results under two reportable segments: U.S. Healthcare Solutions and International Healthcare Solutions. As described in Note 1, Other, which is not considered a reportable segment, consists of businesses for which the Company has begun to explore strategic alternatives.
The chief operating decision maker (“CODM”) of the Company is its President & Chief Executive Officer, whose function is to allocate resources to, and assess the performance of, the Company’s operating segments. The CODM does not review assets by operating segment for the purpose of assessing performance or allocating resources.
The following illustrates reportable and operating segment disaggregated revenue as required by Accounting Standards Codification 606, “Revenue from Contracts with Customer,” for the periods indicated:
| Three months ended December 31, | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| U.S. Healthcare Solutions | $ | 76,211,825 | $ | 72,555,294 | ||||||||||
| International Healthcare Solutions: | ||||||||||||||
| Alliance Healthcare | 6,530,697 | 5,999,200 | ||||||||||||
| Other Healthcare Solutions | 1,093,276 | 959,695 | ||||||||||||
| Total International Healthcare Solutions | 7,623,973 | 6,958,895 | ||||||||||||
| Other: | ||||||||||||||
| Animal Health | 1,471,317 | 1,379,985 | ||||||||||||
| Other non-strategic businesses | 657,630 | 622,470 | ||||||||||||
| Total Other | 2,128,947 | 2,002,455 | ||||||||||||
| Intersegment eliminations | (32,729) | (29,584) | ||||||||||||
| Revenue | $ | 85,932,016 | $ | 81,487,060 | ||||||||||
The following illustrates reportable segment cost of goods sold information for the periods indicated:
| Three months ended December 31, | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| U.S. Healthcare Solutions | $ | 74,328,262 | $ | 71,100,485 | ||||||||||
| International Healthcare Solutions | 6,834,551 | 6,194,653 | ||||||||||||
| Other | 1,804,466 | 1,684,783 | ||||||||||||
| Intersegment eliminations | (28,509) | (27,860) | ||||||||||||
| Total segment cost of goods sold | $ | 82,938,770 | $ | 78,952,061 | ||||||||||
The following illustrates reportable segment operating expenses information for the periods indicated:
| Three months ended December 31, | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| U.S. Healthcare Solutions | $ | 1,052,233 | $ | 767,884 | ||||||||||
| International Healthcare Solutions | 647,266 | 599,062 | ||||||||||||
| Other | 233,064 | 220,343 | ||||||||||||
| Intersegment eliminations | (2,031) | (1,598) | ||||||||||||
| Total segment operating expenses | $ | 1,930,532 | $ | 1,585,691 | ||||||||||
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The following illustrates reportable segment operating income information for the periods indicated:
| Three months ended December 31, | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| U.S. Healthcare Solutions | $ | 831,330 | $ | 686,925 | ||||||||||
| International Healthcare Solutions | 142,156 | 165,180 | ||||||||||||
| Other | 91,417 | 97,329 | ||||||||||||
| Intersegment eliminations | (2,189) | (126) | ||||||||||||
| Total segment operating income | $ | 1,062,714 | $ | 949,308 | ||||||||||
The following reconciles total segment operating income to income before income taxes for the periods indicated:
| Three months ended December 31, | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| Total segment operating income | $ | 1,062,714 | $ | 949,308 | ||||||||||
| Gains from antitrust litigation settlements | 12,152 | 22,870 | ||||||||||||
| LIFO credit | 77,562 | 7,324 | ||||||||||||
Türkiye highly inflationary impact | (10,889) | (7,155) | ||||||||||||
| Acquisition-related intangibles amortization | (125,158) | (164,856) | ||||||||||||
| Litigation and opioid-related credit (expenses), net | 86,151 | (16,765) | ||||||||||||
| Acquisition-related deal and integration expenses | (78,419) | (38,712) | ||||||||||||
| Restructuring and other expenses, net | (14,166) | (45,760) | ||||||||||||
| Impairment of assets, including goodwill | (249,498) | — | ||||||||||||
| Operating income | 760,449 | 706,254 | ||||||||||||
| Other (income) loss, net | (20,600) | 57,874 | ||||||||||||
| Interest expense, net | 72,409 | 27,933 | ||||||||||||
| Income before income taxes | $ | 708,640 | $ | 620,447 | ||||||||||
Segment operating income is evaluated by the CODM of the Company before gains from antitrust litigation settlements; LIFO credit; Türkiye highly inflationary impact; acquisition-related intangibles amortization; litigation and opioid-related credit (expenses), net; acquisition-related deal and integration expenses; restructuring and other expenses, net; and impairment of assets, including goodwill. All corporate office expenses are allocated to the operating segment level.
Litigation and opioid-related credit (expenses), net in the three months ended December 31, 2025 includes an $86.8 million credit related to a derivative lawsuit settlement (see Note 9).
Other (income) loss, net in the three months ended December 31, 2025 includes a $10.5 million gain on the remeasurement of an equity investment. Other (income) loss, net in the three months ended December 31, 2024 includes a $35.5 million loss on the divestiture of non-core businesses.
The following illustrates depreciation and amortization by reportable segment for the periods indicated:
| Three months ended December 31, | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| U.S. Healthcare Solutions | $ | 78,253 | $ | 60,882 | ||||||||||
| International Healthcare Solutions | 35,815 | 33,361 | ||||||||||||
| Other | 21,175 | 19,393 | ||||||||||||
| Acquisition-related intangibles amortization | 125,158 | 164,856 | ||||||||||||
| Total depreciation and amortization | $ | 260,401 | $ | 278,492 | ||||||||||
Depreciation and amortization related to property and equipment and intangible assets excludes amortization of deferred financing costs and other debt-related items, which are included in interest expense, net.
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The following illustrates capital expenditures by reportable segment for the periods indicated:
| Three months ended December 31, | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| U.S. Healthcare Solutions | $ | 66,541 | $ | 41,086 | ||||||||||
| International Healthcare Solutions | 36,290 | 50,971 | ||||||||||||
| Other | 16,545 | 13,836 | ||||||||||||
| Total capital expenditures | $ | 119,376 | $ | 105,893 | ||||||||||
Note 13. Subsequent Event
On February 2, 2026, the Company acquired the majority of the outstanding equity interests that it did not previously own in OneOncology, a physician-led national platform empowering independent medical specialty practices rooted in oncology for a total cash consideration of approximately $4.6 billion. OneOncology’s affiliated practices and management retained a minority interest in OneOncology. The Company funded the transaction through new debt financing (see Note 6 of the Consolidated Notes to Financial Statements). OneOncology’s future operating results will be consolidated as a component of the U.S. Healthcare Solutions reportable segment.
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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
In reviewing this Management’s Discussion and Analysis of Financial Condition and Results of Operations, please note that we face many uncertainties and risks related to various economic, political and regulatory environments in which we operate, both within the U.S. and internationally. Refer to the headings “Item 1A. Risk Factors” in Part I of our Annual Report on Form 10-K for the year ended September 30, 2025, as well as the heading “Cautionary Note Regarding Forward-Looking Statements” above for additional information related to our present business environment.
Recent Developments
New Reporting Structure
We undertook a strategic review of our business to ensure alignment with our growth priorities and strategic drivers. As a result of this review, beginning in the first quarter of fiscal 2026, we reorganized certain business components within our reporting structure. Our revised reporting structure is comprised of U.S. Healthcare Solutions, International Healthcare Solutions, and Other. The U.S. Healthcare Solutions reportable segment consists of U.S. Human Health (excluding legacy U.S. Consulting Services). The International Healthcare Solutions reportable segment consists of Alliance Healthcare, Innomar, World Courier, and strategic components of PharmaLex. Other, which is not considered a reportable segment, consists of businesses for which the Company has begun to explore strategic alternatives and includes MWI Animal Health, Profarma, U.S. Consulting Services, and the other components of PharmaLex. Our previously reported segment results have been revised to conform to our re-aligned reporting structure.
Acquisition
On February 2, 2026, we acquired the majority of the outstanding equity interests that we did not previously own in OneOncology, a physician-led national platform empowering independent medical specialty practices rooted in oncology for a total cash consideration of approximately $4.6 billion. OneOncology’s affiliated practices and management retained a minority interest in OneOncology. We funded the transaction through new debt financing (see Note 6 of the Consolidated Notes to Financial Statements). OneOncology’s future operating results will be consolidated as a component of the U.S. Healthcare Solutions reportable segment.
Executive Summary
This executive summary provides highlights from the results of operations that follow:
•Revenue increased by $4.4 billion, or 5.5%, from the prior year quarter primarily due to growth in both reportable segments. U.S. Healthcare Solutions’ revenue increased by $3.7 billion, or 5.0%, from the prior year quarter primarily due to overall market growth largely driven by unit volume growth, including increased sales of specialty products to health systems and physician practices and products labeled for diabetes and/or weight loss in the GLP-1 class of $1.0 billion, or 10.9%, offset in part by a decrease in sales due to losses of a grocery customer and an oncology customer. International Healthcare Solutions’ revenue increased by $0.7 billion, or 9.6%, from the prior year quarter primarily due to increased sales at our European distribution business of $0.5 billion from the prior year quarter.
•Gross profit increased by $514.0 million, or 20.1%, from the prior year quarter primarily due to the increase in gross profit in both reportable segments and a $70.2 million increase in the LIFO credit. U.S. Healthcare Solutions’ gross profit increased by $428.8 million, or 29.5%, from the prior year quarter primarily due to the January 2025 acquisition of RCA and increased sales. International Healthcare Solutions’ gross profit increased $25.2 million, or 3.3%, from the prior year quarter primarily due to increases in gross profit at our global specialty logistics business and our European distribution business.
•Total operating expenses increased by $459.8 million, or 24.8%, from the prior year quarter primarily due to the January 2025 acquisition of RCA and an impairment of assets of our U.S. Consulting Services business that is held for sale.
•Total segment operating income increased by $113.4 million, or 11.9%, from the prior year quarter. U.S. Healthcare Solutions’ operating income increased by $144.4 million, or 21.0%, from the prior year quarter due to the January 2025 acquisition of RCA and overall growth. International Healthcare Solutions’ operating income decreased by $23.0 million, or 13.9%, from the prior year quarter.
•Our effective tax rates were 20.1% and 20.4% for the three months ended December 31, 2025 and 2024, respectively. The effective tax rates for the three months ended December 31, 2025 and 2024 were lower than the U.S. statutory rate primarily due to the benefit of income taxed at rates lower than the U.S. statutory rate and tax benefits associated with equity compensation, offset in part by U.S. state income taxes.
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Results of Operations
Revenue
| Three months ended December 31, | ||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | Change | |||||||||||||||||
| U.S. Healthcare Solutions | $ | 76,211,825 | $ | 72,555,294 | 5.0% | |||||||||||||||
| International Healthcare Solutions: | ||||||||||||||||||||
| Alliance Healthcare | 6,530,697 | 5,999,200 | 8.9% | |||||||||||||||||
| Other Healthcare Solutions | 1,093,276 | 959,695 | 13.9% | |||||||||||||||||
| Total International Healthcare Solutions | 7,623,973 | 6,958,895 | 9.6% | |||||||||||||||||
| Other: | ||||||||||||||||||||
| Animal Health | 1,471,317 | 1,379,985 | 6.6% | |||||||||||||||||
| Other non-strategic businesses | 657,630 | 622,470 | 5.6% | |||||||||||||||||
| Total Other | 2,128,947 | 2,002,455 | 6.3% | |||||||||||||||||
| Intersegment eliminations | (32,729) | (29,584) | ||||||||||||||||||
| Revenue | $ | 85,932,016 | $ | 81,487,060 | 5.5% | |||||||||||||||
Our future revenue growth will continue to be affected by various factors, such as industry growth trends, including drug utilization (e.g., products labeled for diabetes and/or weight loss in the GLP-1 class), the introduction of new, innovative brand therapies and vaccines, the likely increase in the number of generic drugs and biosimilars that will be available over the next few years as a result of the expiration of certain drug patents held by brand-name pharmaceutical manufacturers and the rate of conversion from brand products to those generic drugs and biosimilars, price inflation and price deflation, general economic conditions in the United States and Europe, currency exchange rates, competition within the industry, customer consolidation, changes in pharmaceutical manufacturer pricing and distribution policies and practices, increased downward pressure on government and other third-party reimbursement rates to our customers, and changes in government rules and regulations.
Revenue increased by $4.4 billion, or 5.5%, from the prior year quarter primarily due to growth in both reportable segments.
U.S. Healthcare Solutions’ revenue increased by $3.7 billion, or 5.0%, from the prior year quarter primarily due to overall market growth largely driven by unit volume growth, including increased sales of specialty products to health systems and physician practices and products labeled for diabetes and/or weight loss in the GLP-1 class of $1.0 billion, or 10.9%, offset in part by a decrease in sales due to losses of a grocery customer and an oncology customer.
International Healthcare Solutions’ revenue increased by $0.7 billion, or 9.6%, from the prior year quarter primarily due to increased sales at our European distribution business of $0.5 billion from the prior year quarter.
Revenue in Other increased by $0.1 billion, or 6.3%, from the prior year quarter due to increased sales at our animal health business and our less-than-wholly-owned Brazil distribution business, offset in part by a decrease in sales at our consulting services businesses.
A number of our contracts with customers, including group purchasing organizations, are typically subject to expiration each year. We may lose a key customer if an existing contract with such customer expires without being extended, renewed, or replaced. Over the next twelve months, there are no key contracts scheduled to expire. Additionally, from time to time, key contracts may be terminated in accordance with their terms or extended, renewed, or replaced prior to their expiration dates. If those contracts are extended, renewed, or replaced at less favorable terms, they may also negatively impact our revenue, results of operations, and cash flows.
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Gross Profit
| Three months ended December 31, | ||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | Change | |||||||||||||||||
| U.S. Healthcare Solutions | $ | 1,883,563 | $ | 1,454,809 | 29.5% | |||||||||||||||
| International Healthcare Solutions | 789,422 | 764,242 | 3.3% | |||||||||||||||||
| Other | 324,481 | 317,672 | 2.1% | |||||||||||||||||
| Intersegment eliminations | (4,220) | (1,724) | ||||||||||||||||||
| Gains from antitrust litigation settlements | 12,152 | 22,870 | ||||||||||||||||||
| LIFO credit | 77,562 | 7,324 | ||||||||||||||||||
Türkiye highly inflationary impact | (10,889) | (7,155) | ||||||||||||||||||
| Gross profit | $ | 3,072,071 | $ | 2,558,038 | 20.1% | |||||||||||||||
Gross profit increased by $514.0 million, or 20.1%, from the prior year quarter primarily due to the increase in gross profit in both reportable segments and a $70.2 million increase in the LIFO credit.
U.S. Healthcare Solutions’ gross profit increased by $428.8 million, or 29.5%, from the prior year quarter primarily due to the January 2025 acquisition of RCA and increased sales. As a percentage of revenue, U.S. Healthcare Solutions’ gross profit margin of 2.47% in the current year quarter increased 46 basis points from the prior year quarter primarily due to the January 2025 acquisition of RCA, offset in part by higher sales of GLP-1 products, which have lower gross profit margins.
International Healthcare Solutions’ gross profit increased $25.2 million, or 3.3%, from the prior year quarter primarily due to increases in gross profit at our global specialty logistics business and our European distribution business.
Gross profit in Other increased by $6.8 million, or 2.1%, from the prior year quarter.
We recognized gains from antitrust litigation settlements with pharmaceutical manufacturers of $12.2 million and $22.9 million in the three months ended December 31, 2025 and 2024, respectively. The gains were recorded as reductions to Cost of Goods Sold (see Note 10 of the Notes to Consolidated Financial Statements).
Our cost of goods sold for interim periods includes a LIFO provision that is recorded ratably on a quarterly basis and is based on our estimated annual LIFO provision. The annual LIFO provision, which we estimate on a quarterly basis, is affected by manufacturer pricing practices, which may be impacted by market and other external influences, expected changes in inventory quantities, and product mix, many of which are difficult to predict. Changes to any of the above factors may have a material impact on our annual LIFO provision. Based on estimates in our current fiscal year LIFO provision, the increase in the LIFO credit in the current year quarter is primarily due to a decline in manufacturer prices related to certain brand pharmaceutical products.
We recognized expense in Cost of Goods Sold of $10.9 million and $7.2 million in the three months ended December 31, 2025 and 2024, respectively, related to the impact of Türkiye highly inflationary accounting driven by the continued weakening of the Turkish Lira.
Operating Expenses
| Three months ended December 31, | ||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | Change | |||||||||||||||||
| Distribution, selling, and administrative | $ | 1,795,289 | $ | 1,472,055 | 22.0% | |||||||||||||||
| Depreciation and amortization | 260,401 | 278,492 | (6.5)% | |||||||||||||||||
| Litigation and opioid-related (credit) expenses, net | (86,151) | 16,765 | ||||||||||||||||||
| Acquisition-related deal and integration expenses | 78,419 | 38,712 | ||||||||||||||||||
| Restructuring and other expenses, net | 14,166 | 45,760 | ||||||||||||||||||
| Impairment of assets, including goodwill | 249,498 | — | ||||||||||||||||||
| Total operating expenses | $ | 2,311,622 | $ | 1,851,784 | 24.8% | |||||||||||||||
Distribution, selling, and administrative expenses increased by $323.2 million, or 22.0%, compared to the prior year quarter primarily due to the January 2025 acquisition of RCA and to support our revenue growth. As a percentage of revenue,
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distribution, selling, and administrative expenses were 2.09% in the current year quarter and represents an increase of 28 basis points compared to the prior year quarter primarily due to the acquisition of RCA.
Depreciation expense increased 19.1% from the prior year quarter. Amortization expense decreased 23.9% from the prior year quarter due to certain tradenames becoming fully amortized in connection with our company name change to Cencora and the gradual transition away from other tradenames used, which were acquired through prior acquisitions.
Litigation and opioid-related (credit) expenses, net in the three months ended December 31, 2025 and 2024 include legal fees in connection with opioid lawsuits and investigations. Litigation and opioid-related (credit) expenses, net in the three months ended December 31, 2025 also includes an $86.8 million credit related to a derivative lawsuit settlement (see Note 9 of the Consolidated Notes to Financial Statements).
Acquisition-related deal and integration expenses in the three months ended December 31, 2025 included expenses related to our acquisitions of RCA and OneOncology, costs associated with strategic alternatives of certain non-core businesses, and the continued integration of PharmaLex. Acquisition-related deal and integration expenses in the three months ended December 31, 2024 primarily included costs related to the acquisition of RCA and the integration of PharmaLex.
Restructuring and other expenses, net are comprised of the following:
| Three months ended December 31, | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| Restructuring and employee severance costs, net | $ | 3,678 | $ | 19,555 | ||||||||||
| Business transformation efforts | 10,126 | 25,074 | ||||||||||||
| Other, net | 362 | 1,131 | ||||||||||||
| Total restructuring and other expenses, net | $ | 14,166 | $ | 45,760 | ||||||||||
Restructuring and employee severance costs, net in the three months ended December 31, 2025 primarily included costs associated with workforce reductions, offset in part by a gain on the sale of a facility. Restructuring and employee severance costs, net in the three months ended December 31, 2024 primarily included costs associated with workforce reductions.
Business transformation efforts in the three months ended December 31, 2025 and 2024 included non-recurring expenses related to significant strategic initiatives to improve operational efficiency, including certain technology initiatives. Business transformation efforts in the three months ended December 31, 2024 also included rebranding costs associated with our name change to Cencora. The majority of these costs are related to services provided by third-party consultants.
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We recorded an impairment of assets of $249.5 million, including goodwill, related to our U.S. Consulting Services business that was classified as held for sale as of December 31, 2025.
Operating Income
| Three months ended December 31, | ||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | Change | |||||||||||||||||
| U.S. Healthcare Solutions | $ | 831,330 | $ | 686,925 | 21.0% | |||||||||||||||
| International Healthcare Solutions | 142,156 | 165,180 | (13.9)% | |||||||||||||||||
| Other | 91,417 | 97,329 | (6.1)% | |||||||||||||||||
| Intersegment eliminations | (2,189) | (126) | ||||||||||||||||||
| Total segment operating income | 1,062,714 | 949,308 | 11.9% | |||||||||||||||||
| Gains from antitrust litigation settlements | 12,152 | 22,870 | ||||||||||||||||||
| LIFO credit | 77,562 | 7,324 | ||||||||||||||||||
Türkiye highly inflationary impact | (10,889) | (7,155) | ||||||||||||||||||
| Acquisition-related intangibles amortization | (125,158) | (164,856) | ||||||||||||||||||
| Litigation and opioid-related credit (expenses), net | 86,151 | (16,765) | ||||||||||||||||||
| Acquisition-related deal and integration expenses | (78,419) | (38,712) | ||||||||||||||||||
| Restructuring and other expenses, net | (14,166) | (45,760) | ||||||||||||||||||
| Impairment of assets, including goodwill | (249,498) | — | ||||||||||||||||||
| Operating income | $ | 760,449 | $ | 706,254 | 7.7% | |||||||||||||||
U.S. Healthcare Solutions’ operating income increased by $144.4 million, or 21.0%, from the prior year quarter primarily due to the increase in gross profit, as noted above, and was offset in part by the increase in operating expenses. As a percentage of revenue, U.S. Healthcare Solutions’ operating income margin was 1.09% in the current year quarter and represents an increase of 14 basis points from the prior year quarter due to the increase gross profit margin, as described above in the Gross Profit section, offset in part by increase in the operating expense margin.
International Healthcare Solutions’ operating income decreased by $23.0 million, or 13.9%, from the prior year quarter primarily due to lower operating income at our European distribution business, offset in part by an increase in operating income at our global specialty logistics business.
Operating income in Other decreased by $5.9 million, or 6.1%, from the prior year quarter primarily due to lower operating income at our consulting services businesses, offset in part by an increase in operating income at our animal health business.
Other (Income) Loss, Net
Other (income) loss, net in the three months ended December 31, 2025 includes a $14.4 million gain on the foreign currency remeasurement of Swiss deferred tax assets arising from 2020 Swiss tax reform and a $10.5 million gain on the remeasurement of an equity investment. Other (income) loss, net in the three months ended December 31, 2024 includes a $35.5 million loss on the divestiture of non-core businesses and a $15.2 million loss on the foreign currency remeasurement of Swiss deferred tax assets arising from 2020 Swiss tax reform.
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Interest Expense, Net
| Three months ended December 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
| (dollars in thousands) | Amount | Weighted Average Interest Rate | Amount | Weighted Average Interest Rate | ||||||||||||||||||||||
| Interest expense | $ | 93,363 | 4.00% | $ | 61,181 | 3.90% | ||||||||||||||||||||
| Interest income | (20,954) | 3.56% | (33,248) | 5.44% | ||||||||||||||||||||||
| Interest expense, net | $ | 72,409 | $ | 27,933 | ||||||||||||||||||||||
Interest expense, net increased by $44.5 million, or 159.2%, from the prior year quarter due to the increase in interest expense and a decrease in interest income. The increase in interest expense was primarily due to the issuance of our $1.8 billion of senior notes in December 2024 and the $0.8 billion balance remaining on the variable-rate term loan, which we borrowed in January 2025 to finance a portion of the RCA acquisition, and the issuance of our €1.0 billion of senior notes in May 2025, offset in part by the repayment of our $500 million of senior notes that matured in March 2025. The decrease in interest income was primarily driven by lower investment interest rates in the current year quarter in comparison to the prior year quarter.
Income Tax Expense
Our effective tax rates were 20.1% and 20.4% for the three months ended December 31, 2025 and 2024, respectively. The effective tax rates for the three months ended December 31, 2025 and 2024 were lower than the U.S. statutory rate primarily due to the benefit of income taxed at rates lower than the U.S. statutory rate and tax benefits associated with equity compensation, offset in part by U.S. state income taxes.
Liquidity and Capital Resources
Our operating results have generated cash flows, which, together with availability under our debt agreements and credit terms from suppliers, have provided sufficient capital resources to finance working capital and cash operating requirements, and to fund capital expenditures, acquisitions, repayment of debt, the payment of interest on outstanding debt, dividends, and purchases of shares of our common stock.
Our primary ongoing cash requirements will be to finance working capital, fund the repayment of debt, fund the payment of interest on debt, fund the payment of dividends, fund purchases of our common stock, finance acquisitions, and fund capital expenditures and routine growth and expansion through new business opportunities. Future cash flows from operations and borrowings are expected to be sufficient to fund our ongoing cash requirements, including the opioid litigation payments that will be made over the next 13 years (see below).
As of December 31, 2025 and September 30, 2025, our cash and cash equivalents held by foreign subsidiaries were $864.6 million and $957.7 million, respectively. We have the ability to repatriate the majority of our cash and cash equivalents held by our foreign subsidiaries without incurring significant additional taxes upon repatriation.
Our cash balances in the three months ended December 31, 2025 and 2024 were supplemented by intra-period credit facility borrowings to cover short-term working capital needs. The largest amount of intra-period borrowings that was outstanding at any one time under our revolving and securitization credit facilities during the three months ended December 31, 2025 and 2024 was $1.6 billion and $2.1 billion, respectively. We had $23.5 billion and $13.4 billion of cumulative intra-period borrowings that were repaid under our credit facilities during the three months ended December 31, 2025 and 2024, respectively.
Cash Flows
We used $2.3 billion of cash in operations during the three months ended December 31, 2025 compared to $2.7 billion of cash used in operations during the three months ended December 31, 2024, a decrease of $0.4 billion. The timing of cash receipts and disbursements and inventory purchases can significantly impact our working capital. In the three months ended December 31, 2025, the growth of our accounts receivable, inventories, and accounts payable resulted in $3.0 billion of cash used in operations compared to $3.3 billion of cash used in the three months ended December 31, 2024.
During the three months ended December 31, 2025, our operating activities used cash of $2.3 billion and was principally the result of the following:
•An increase in inventories of $3.5 billion to support the increase in business volume and due to seasonal needs;
•An increase in accounts receivable of $0.8 billion primarily due to an increase in sales and the timing of scheduled payments from our customers; and
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•A decrease in accrued expenses of $0.3 billion primarily due to the payment of accrued liabilities that were on our Consolidated Balance Sheet as of September 30, 2025.
The cash used in the above items was offset in part by the following:
•An increase in accounts payable of $1.3 billion due to the increase in our inventory balances and the timing of scheduled payments to our suppliers;
•Net income of $0.6 billion; and
•Positive non-cash items of $0.5 billion, which is primarily comprised of a $0.2 billion impairment of assets, including goodwill, depreciation expense of $0.1 billion, and amortization expense of $0.1 billion.
During the three months ended December 31, 2024, our operating activities used cash of $2.7 billion and was principally the result of the following:
•An increase in inventories of $1.7 billion to support the increase in business volume and due to seasonal needs;
•An increase in accounts receivable of $1.0 billion primarily due to an increase in sales and the timing of scheduled payments from our customers; and
•A decrease in accounts payable of $0.7 billion primarily due to the timing of scheduled payments to our suppliers.
The cash used in the above items was offset in part by the following:
•Net income of $0.5 billion; and
•Positive non-cash items of $0.4 billion, which is primarily comprised of amortization expense of $0.2 billion and depreciation expense of $0.1 billion.
We use days sales outstanding, days inventory on hand, and days payable outstanding to evaluate our working capital performance. The below financial metrics are calculated based upon a quarterly average and can be impacted by the timing of cash receipts and disbursements, which can vary significantly depending upon the day of the week on which the period ends.
| Three months ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Days sales outstanding | 27.8 | 27.8 | |||||||||
| Days inventory on hand | 27.8 | 26.0 | |||||||||
| Days payable outstanding | 59.2 | 58.5 | |||||||||
Our cash flows from operating activities can vary significantly from period to period based upon fluctuations in our period-end working capital account balances. Any changes to payment terms with a key customer or manufacturer supplier could have a material impact to our cash flows from operations. The addition of any new key customer or the loss of an existing key customer could have a material impact on our cash flows from operations.
Operating cash flows during the three months ended December 31, 2025 included $87.9 million of interest payments and $30.9 million of income tax payments, net of refunds. Operating cash flows during the three months ended December 31, 2024 included $48.8 million of interest payments and $29.5 million of income tax payments, net of refunds.
Capital expenditures in the three months ended December 31, 2025 and 2024 were $119.4 million and $105.9 million, respectively. Significant capital expenditures in the three months ended December 31, 2025 and 2024 included investments relating to the continued expansion and enhancement of our distribution network and various technology initiatives.
We currently expect to invest approximately $900 million in capital expenditures during fiscal 2026. Larger 2026 capital expenditures will include investments relating to the continued expansion and enhancement of our distribution network and various technology initiatives.
In addition to capital expenditures, net cash used in investing activities in the three months ended December 31, 2025 included $0.2 billion for acquisitions. In addition to capital expenditures, net cash used in investing activities in the three months ended December 31, 2024 included $0.2 billion for equity investments.
Net cash provided by financing activities of $43.2 million in the three months ended December 31, 2025 principally resulted from the $0.3 billion of net borrowings under our revolving credit facilities to cover seasonal, short-term working capital needs, offset in part by $0.1 billion in cash dividends paid on our common stock and $0.1 billion in purchases of our common stock related to employee tax withholdings related to restricted share vesting.
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Net cash provided by financing activities of $3.2 billion in the three months ended December 31, 2024 principally resulted from the $2.0 billion of net borrowings under our revolving credit facilities to cover seasonal, short-term working capital needs and the $1.8 billion issuance of senior notes to finance a portion of the acquisition of RCA, offset in part by $0.4 billion in purchases of our common stock and $0.1 billion in cash dividends paid on our common stock.
Debt and Credit Facility Availability
The following table illustrates our debt structure as of December 31, 2025, including availability under the multi-currency revolving credit facility, the receivables securitization facility, the money market facility, the working capital credit facility, and the Alliance Healthcare debt:
| (in thousands) | Outstanding Balance | Additional Availability | ||||||||||||
| Fixed-Rate Debt: | ||||||||||||||
| $750,000, 3.450% senior notes due 2027 | $ | 748,360 | $ | — | ||||||||||
| $500,000, 4.625% senior notes due 2027 | 497,615 | — | ||||||||||||
| €500,000, 2.875% senior notes due 2028 | 584,652 | — | ||||||||||||
| $600,000, 4.850% senior notes due 2029 | 596,804 | — | ||||||||||||
| $500,000, 2.800% senior notes due 2030 | 497,327 | — | ||||||||||||
| $1,000,000, 2.700% senior notes due 2031 | 994,118 | — | ||||||||||||
| €500,000, 3.625% senior notes due 2032 | 582,335 | — | ||||||||||||
| $500,000, 5.125% senior notes due 2034 | 495,251 | — | ||||||||||||
| $700,000, 5.150% senior notes due 2035 | 695,048 | |||||||||||||
| $500,000, 4.250% senior notes due 2045 | 495,846 | — | ||||||||||||
| $500,000, 4.300% senior notes due 2047 | 494,154 | — | ||||||||||||
| Nonrecourse debt | 52,181 | — | ||||||||||||
| Total fixed-rate debt | 6,733,691 | — | ||||||||||||
| Variable-Rate Debt: | ||||||||||||||
| Multi-currency revolving credit facility due in 2030 | 220,000 | 4,280,000 | ||||||||||||
| Receivables securitization facility due in 2028 | — | 1,500,000 | ||||||||||||
| Term loan due in 2027 | 799,177 | — | ||||||||||||
| Money market facility due in 2027 | — | 750,000 | ||||||||||||
| Working capital credit facility due in 2026 | — | 500,000 | ||||||||||||
| Alliance Healthcare debt | 70,507 | 655,665 | ||||||||||||
| Nonrecourse debt | 98,360 | — | ||||||||||||
| Total variable-rate debt | 1,188,044 | 7,685,665 | ||||||||||||
| Total debt | $ | 7,921,735 | $ | 7,685,665 | ||||||||||
We had a $4.5 billion multi-currency senior unsecured revolving credit facility (“Multi-Currency Revolving Credit Facility”) with a syndicate of lenders. In January 2026, we amended and restated the Multi-Currency Revolving Credit Facility to increase the aggregate amount of the commitments under this facility to $5.5 billion. The Multi-Currency Revolving Credit Facility is scheduled to expire in June 2030. Interest on borrowings under the Multi-Currency Revolving Credit Facility accrues at specified rates based upon our debt rating. We pay facility fees to maintain the availability under the Multi-Currency Revolving Credit Facility at specified rates based on our debt rating. We may choose to repay or reduce our commitments under the Multi-Currency Revolving Credit Facility at any time. The Multi-Currency Revolving Credit Facility contains covenants, including compliance with a financial leverage ratio test, as well as others that impose limitations on, among other things, indebtedness of subsidiaries and asset sales, with which we were compliant as of December 31, 2025.
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We have a $4.5 billion commercial paper program. The commercial paper program does not increase our borrowing capacity, and it is fully backed by our Multi-Currency Revolving Credit Facility. We may, from time to time, issue short-term promissory notes in an aggregate amount of up to $4.5 billion at any one time. Amounts available under the program may be borrowed, repaid, and re-borrowed from time to time. The maturities on the notes will vary but may not exceed 365 days from the date of issuance. The notes will bear interest, if interest bearing, or will be sold at a discount from their face amounts. There were $220.0 million of borrowings outstanding under the commercial paper program as of December 31, 2025 and none outstanding as of September 30, 2025.
We have a $1.5 billion receivables securitization facility (“Receivables Securitization Facility”), which is scheduled to expire in June 2028. The Receivables Securitization Facility has an accordion feature that allows us to increase the commitment on the Receivables Securitization Facility by up to $500 million, subject to lender approval. Interest rates are based on prevailing market rates for short-term commercial paper or 30-day Term SOFR, plus a program fee. We pay a customary unused fee at prevailing market rates, monthly, to maintain the availability under the Receivables Securitization Facility. The Receivables Securitization Facility contains similar covenants to the Multi-Currency Revolving Credit Facility, with which we were compliant as of December 31, 2025. There were no borrowings outstanding under the Receivables Securitization Facility as of December 31, 2025 and September 30, 2025.
In connection with the Receivables Securitization Facility, AmerisourceBergen Drug Corporation and a specialty distribution subsidiary sell on a revolving basis certain accounts receivable to Amerisource Receivables Financial Corporation, a wholly-owned special purpose entity, which in turn sells a percentage ownership interest in the receivables to financial institutions and commercial paper conduits sponsored by financial institutions. AmerisourceBergen Drug Corporation is the servicer of the accounts receivable under the Receivables Securitization Facility. As sold receivables are collected, additional receivables may be sold up to the maximum amount available under the facility. We use the facility as a financing vehicle because it generally offers an attractive interest rate relative to other financing sources. We securitize our trade accounts, which are generally non-interest bearing, in transactions that are accounted for as borrowings.
We have an uncommitted, unsecured line of credit available to us pursuant to a money market credit agreement (the “Money Market Facility”) that allows us to request short-term unsecured revolving credit loans in a principal amount not to exceed $500 million on or after April 1 and before December 1 of any year and increases to $750 million on or after December 1 and before March 31 of any year. The Money Market Facility may be decreased or terminated by the bank or us at any time without prior notice. There were no borrowings outstanding under the Money Market Facility as of December 31, 2025 and September 30, 2025.
We have an uncommitted, unsecured line of credit to support our working capital needs (“Working Capital Credit Facility”). The Working Capital Credit Facility provides us with the ability to request short-term, unsecured revolving credit loans from time to time in a principal amount not to exceed $500 million. The Working Capital Credit Facility expires in July 2026 and may be decreased or terminated by the bank or us at any time without prior notice. There were no borrowings outstanding under the Working Capital Credit Facility as of December 31, 2025 and September 30, 2025.
In January 2026, we entered into an agreement pursuant to which we obtained a $1.5 billion delayed draw senior unsecured term loan facility (“Multi-Year Term Loan Facility”) with a syndicate of lenders consisting of a $500 million tranche (“Tranche One”) and a $1.0 billion tranche (“Tranche Two”). Tranche One and Tranche Two mature two years and three years, respectively, from February 2, 2026, the date on which it was drawn. The Multi-Year Term Loan Facility was used to finance a portion of the acquisition of OneOncology (see Note 13 of the Consolidated Notes to Financial Statements).
The Multi-Year Term Loan Facility will bear interest at a rate equal to either a Term SOFR rate or a Daily Simple SOFR rate, plus an applicable margin, or an alternate base rate, plus an applicable margin, in each case based on our public debt ratings. We have also agreed to pay a fee that will, commencing on April 1, 2026, accrue at specified rates based on our public debt ratings, on the daily amount of unused commitments under the Multi-Year Term Loan Facility. We have the right to prepay borrowings under the Multi-Year Term Loan Facility at any time, in whole or in part and without premium or penalty. We may also choose to reduce our commitments under the Multi-Year Term Credit Facility at any time.
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In January 2026, we entered into an agreement pursuant to which we obtained a $3.0 billion delayed draw senior unsecured term loan facility (the “364-Day Term Loan Facility”) with a syndicate of lenders, which matures 364 days from February 2, 2026, the date on which it was drawn. The 364-Day Term Loan Facility was used to finance a portion of the acquisition of OneOncology.
Interest on borrowings under the 364-Day Term Loan Facility will accrue at a rate equal to either a Term SOFR or a Daily Simple SOFR, plus an applicable margin or an alternate base rate plus an applicable margin, in each case based on our public debt ratings. We have also agreed to pay a fee that will, commencing on April 1, 2026, accrue at specified rates based on our public debt ratings, on the daily amount of unused commitments under the 364-Day Term Loan Facility. We have also agreed to pay a duration fee on the outstanding commitment amount as of May 29, 2026 under the 364-Day Term Loan Facility. We also have the right to prepay borrowings under the 364-Day Term Loan Facility at any time, in whole or in part and without premium or penalty.
Alliance Healthcare debt is comprised of uncommitted revolving credit facilities in various currencies with various rates. A vast majority of the outstanding borrowings as of December 31, 2025 were held in Türkiye. These facilities are used to fund its working capital needs.
Nonrecourse debt is comprised of short-term and long-term debt belonging to the Brazil subsidiaries and is repaid solely from the Brazil subsidiaries’ cash flows and such debt agreements provide that the repayment of the loans (and interest thereon) is secured solely by the capital stock, physical assets, contracts, and cash flows of the Brazil subsidiaries.
Share Purchase Programs and Dividends
In March 2024, our Board of Directors (the “Board”) authorized a share repurchase program allowing us to purchase up to $2.0 billion of our outstanding shares of common stock, subject to market conditions. In the three months ended December 31, 2025, we did not purchase any shares of our common stock. As of December 31, 2025, we had $882.2 million of availability under this program.
In November 2025, our Board increased the quarterly dividend paid on common stock by 9% from $0.55 per share to $0.60 per share. We anticipate that we will continue to pay quarterly cash dividends in the future. However, the payment and amount of future dividends remains within the discretion of our Board of Directors and will depend upon future earnings, financial condition, capital requirements, and other factors.
Commitments and Obligations
As discussed and defined in Note 9 of the Notes to Consolidated Financial Statements, on July 21, 2021, it was announced that we and the two other national pharmaceutical distributors had negotiated a Distributor Settlement Agreement. The Distributor Settlement Agreement became effective on April 2, 2022, and as of December 31, 2025, it included 48 of 49 eligible states (the “Settling States”) as well as 99% by population of the eligible political subdivisions in the Settling States. Our accrued litigation liability related to the Distributor Settlement Agreement and an estimate for non-participating government subsidiaries (with whom we have not reached a settlement agreement), as well as other opioid-related litigation for which we have reached settlement agreements on our Consolidated Balance Sheet as of December 31, 2025 is $4.3 billion and is expected to be paid over the next 13 years. We currently estimate that $426.2 million will be paid prior to December 31, 2026. The payment of the aforementioned litigation liability has not and is not expected to have an impact on our ability to pay dividends.
The following is a summary of our contractual obligations for future principal and interest payments on our debt, minimum rental payments on our noncancellable operating leases, and minimum payments on our other commitments as of December 31, 2025:
| Payments Due by Period (in thousands) | Debt, Including Interest Payments | Operating Leases | Other Commitments | Total | ||||||||||||||||||||||
| Within 1 year | $ | 673,660 | $ | 322,454 | $ | 281,694 | $ | 1,277,808 | ||||||||||||||||||
| 1-3 years | 3,201,071 | 567,238 | 518,321 | 4,286,630 | ||||||||||||||||||||||
| 4-5 years | 1,518,806 | 418,846 | 357,327 | 2,294,979 | ||||||||||||||||||||||
| After 5 years | 4,781,442 | 674,938 | 392,331 | 5,848,711 | ||||||||||||||||||||||
| Total | $ | 10,174,979 | $ | 1,983,476 | $ | 1,549,673 | $ | 13,708,128 | ||||||||||||||||||
Included in “Other Commitments” in the above table is $685 million to support our U.S. Healthcare Solutions reportable segment’s primary ERP system upgrade and $594 million for other digital transformation projects.
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Our liability for uncertain tax positions was $650.1 million (including interest and penalties) as of December 31, 2025. This liability represents an estimate of tax positions that we have taken in our tax returns which may ultimately not be sustained upon examination by taxing authorities. Since the amount and timing of any future cash settlements cannot be predicted with reasonable certainty, the estimated liability has been excluded from the above contractual obligations table. Our liability for uncertain tax positions as of December 31, 2025 primarily includes an uncertain tax benefit related to the legal accrual for litigation related to the distribution of prescription opioid pain medications, as disclosed in Note 9 of the Notes to Consolidated Financial Statements.
Market and Risks
We have exposure to foreign currency and exchange rate risk from our non-U.S. operations. Our largest exposure to foreign exchange rates exists primarily with the U.K. Pound Sterling, the Euro, the Turkish Lira, the Brazilian Real, and the Canadian Dollar. We use forward contracts to hedge against the foreign currency exchange rate impact on certain intercompany receivable and payable balances. We use foreign currency denominated debt held at the parent level to offset a portion of our foreign currency exchange rate exposure on our net investments in Euro-denominated subsidiaries. We may use derivative instruments to hedge our foreign currency exposure, but not for speculative or trading purposes. Revenue from our foreign operations during the three months ended December 31, 2025 was approximately 10% of our consolidated revenue.
We have market risk exposure to interest rate fluctuations relating to our debt. We manage interest rate risk by using a combination of fixed-rate and variable-rate debt. The amount of variable-rate debt fluctuates during the year based on our working capital requirements. We had $1.2 billion of variable-rate debt outstanding as of December 31, 2025. We periodically evaluate financial instruments to manage our exposure to fixed and variable interest rates. However, there are no assurances that such instruments will be available in the combinations we want and/or on terms acceptable to us. There were no such financial instruments in effect as of December 31, 2025.
We also have market risk exposure to interest rate fluctuations relating to our cash and cash equivalents. We had $1.8 billion in cash and cash equivalents as of December 31, 2025. The unfavorable impact of a hypothetical decrease in interest rates on cash and cash equivalents would be partially offset by the favorable impact of such a decrease on variable-rate debt. For every $100 million of cash invested that is in excess of variable-rate debt, a 10-basis point decrease in interest rates would increase our annual net interest expense by $0.1 million.
Deterioration of general economic conditions, among other factors, could adversely affect the number of prescriptions that are filled and the amount of pharmaceutical products purchased by consumers and, therefore, could reduce purchases by our customers. In addition, volatility in financial markets and higher borrowing costs may also negatively impact our customers’ ability to obtain credit to finance their businesses on acceptable terms. Reduced purchases by our customers or changes in the ability of our customers to remit payments to us could adversely affect our revenue growth, our profitability, and our cash flow from operations.
Inflation in the global and U.S. economies has impacted certain operating expenses. If inflation persists or increases, our operations and financial results could be adversely affected, particularly in certain global markets.
We have risks from other geopolitical trends and events, such as rising nationalism, the conflict in Ukraine, and evolving conditions in the Middle East. Although the long-term implications of these conflicts are difficult to predict at this time, the financial impact of these conflicts has not been material to our financial results.
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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
We have no material changes to the disclosures on this matter made in our Annual Report on Form 10-K for the year ended September 30, 2025.
ITEM 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are intended to ensure that information required to be disclosed in the Company’s reports submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. These controls and procedures also are intended to ensure that information required to be disclosed in such reports is accumulated and communicated to management to allow timely decisions regarding required disclosures.
The Company’s Chief Executive Officer and Chief Financial Officer, with the participation of other members of the Company’s management, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) and have concluded that the Company’s disclosure controls and procedures were effective for their intended purposes as of the end of the period covered by this report.
Changes in Internal Control over Financial Reporting
During the first quarter of fiscal 2026, there was no change in Cencora, Inc.’s internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
See Note 9 (Legal Matters and Contingencies) of the Notes to Consolidated Financial Statements set forth under Item 1 of Part I of this Quarterly Report on Form 10-Q for the Company’s current description of legal proceedings.
ITEM 1A. Risk Factors
Our significant business risks are described in Item 1A to our Form 10-K for the fiscal year ended September 30, 2025 to which reference is made herein.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
(c) Issuer Purchases of Equity Securities
The following table sets forth the number of shares purchased, the average price paid per share, the total number of shares purchased as part of publicly announced programs, and the approximate dollar value of shares that may yet be purchased under the programs during each month in the fiscal quarter ended December 31, 2025. See Note 7, “Stockholders’ Equity and Earnings per Share,” contained in “Notes to Consolidated Financial Statements” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
| Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs | |||||||||||||||||||||||||
| October 1 to October 31 | 6,847 | $ | 327.91 | — | $ | 882,238,036 | |||||||||||||||||||||||
| November 1 to November 30 | 277,668 | $ | 341.23 | — | $ | 882,238,036 | |||||||||||||||||||||||
| December 1 to December 31 | 3,304 | $ | 350.53 | — | $ | 882,238,036 | |||||||||||||||||||||||
| Total | 287,819 | — | |||||||||||||||||||||||||||
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Mine Safety Disclosures
Not applicable.
ITEM 5. Other Information
Executive Officer Trading Arrangements
During the three months ended December 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated any contract, instruction, or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act (a “Rule 10b5-1 trading arrangement”) or any non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K), except as follows:
Robert P. Mauch, our President and Chief Executive Officer, adopted a Rule 10b5-1 trading arrangement on December 16, 2025, pursuant to which he may sell up to 24,287 shares of the Company’s common stock, including shares to be received upon the exercise of vested stock options, prior to the earlier to occur of October 30, 2026 or completion of all sales under the plan.
Elizabeth S. Campbell, our Executive Vice President and Chief Legal Officer, adopted a Rule 10b5-1 trading arrangement on December 19, 2025, pursuant to which she may sell up to 10,738 shares of the Company's common stock, prior to the earlier to occur of December 18, 2026 or completion of all sales under the plan.
James F. Cleary, our Executive Vice President and Chief Financial Officer, adopted a Rule 10b5-1 trading arrangement on December 19, 2025, pursuant to which he may sell up to 75,000 shares of the Company's common stock, including shares to be received upon the exercise of vested stock options, prior to the earlier to occur of December 31, 2026 or completion of all sales under the plan.
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ITEM 6. Exhibits
(a) Exhibits:
| Exhibit Number | Description | ||||
| 10.1 | Incremental Facility and Amendment Agreement, dated as of January 12, 2026, among the Registrant, the borrowing subsidiaries party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Registrant on January 16, 2026). | ||||
| 10.2 | |||||
| 10.3 | |||||
| 31.1 | |||||
| 31.2 | |||||
| 32 | |||||
| 101 | Financial statements from the Quarterly Report on Form 10-Q of Cencora, Inc. for the quarter ended December 31, 2025, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements. | ||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | ||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CENCORA, INC. | |||||
| February 4, 2026 | /s/ Robert P. Mauch | ||||
| Robert P. Mauch | |||||
| President and Chief Executive Officer | |||||
| February 4, 2026 | /s/ James F. Cleary | ||||
| James F. Cleary | |||||
| Executive Vice President and Chief Financial Officer | |||||
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