McKesson Corporation Reports Fiscal 2024 Fourth Quarter and Full Year Results

Fourth Quarter Highlights:

• Consolidated revenues of $76.4 billion increased by 11%.
• Earnings per diluted share from continuing operations of $6.02 increased $0.31.
• Adjusted Earnings per Diluted Share of $6.18 decreased by 14%.

Full Year Highlights:

• Consolidated revenues of $309.0 billion increased by 12%.
• Earnings per diluted share from continuing operations of $22.39 decreased $2.66.
• Adjusted Earnings per Diluted Share of $27.44 increased by 6%.
• Cash flow from operations of $4.3 billion and Free Cash Flow of $3.6 billion.

Fiscal 2025 Outlook:

• Fiscal 2025 Adjusted Earnings per Diluted Share guidance range of $31.25 to $32.05 indicates 14% to 17% forecasted growth compared to the prior year.
• The Company does not forecast GAAP earnings per diluted share from continuing operations¹.

IRVING, Texas, May 7, 2024 - McKesson Corporation (NYSE:MCK) today announced results for the fourth quarter and fiscal year ended March 31, 2024.

Fiscal 2024 Fourth Quarter and Full Year Result Summary

McKesson reported fourth quarter results, marking the close to a strong fiscal 2024, underpinned by continued momentum across the enterprise, said Brian Tyler, chief executive officer. The results underscore the execution against our company priorities, differentiated capabilities within the oncology and biopharma services platforms, and the sustained strength of our core distribution businesses. We continue to leverage the breadth and depth of our assets, delivering meaningful outcomes for our customers, partners, patients, and communities. I want to thank all McKesson employees for their efforts, dedication, and contributions.

Looking ahead to fiscal 2025, we are well-positioned to further expand on the extensive range of our assets and capabilities, execute against our strategic initiatives, foster sustainable growth, and create long-term value for all stakeholders, said Mr. Tyler. We are excited about the opportunities ahead as we advance health outcomes for all.

Fourth quarter revenues were $76.4 billion, an increase of 11% from a year ago. Revenue increases were primarily driven by growth in the U.S. Pharmaceutical segment, resulting from increased prescription volumes, including higher volumes from specialty products, retail national account customers, and GLP-1 medications.

Fourth quarter earnings per diluted share from continuing operations was $6.02 compared to $5.71 a year ago, an increase of $0.31. Full year earnings per diluted share from continuing operations was $22.39 compared to $25.05 a year ago, a decrease of $2.66.

Fourth quarter Adjusted Earnings per Diluted Share was $6.18 compared to $7.19 a year ago, a decrease of 14%, driven by a higher tax rate, partially offset by a lower share count and growth in the U.S. Pharmaceutical segment. Full year Adjusted Earnings per Diluted Share was $27.44 compared to $25.94 a year ago, an increase of 6%, led by growth in the U.S. Pharmaceutical and Prescription Technology Solutions segments and a lower share count, partially offset by higher corporate expenses.

For the full year, McKesson returned $3.3 billion of cash to shareholders, which included $3.0 billion of common stock repurchases and $314 million of dividend payments. During the fiscal year, McKesson generated cash from operations of $4.3 billion, and invested $687 million in capital expenditures, resulting in Free Cash Flow of $3.6 billion.

Business Highlights

• McKesson continued to advance and expand its oncology and biopharma services platforms.
  • In the past year, McKesson’s CoverMyMeds business helped patients save more than $8.8 billion on brand and specialty medications, helped to prevent 10.7 million prescriptions from being abandoned due to affordability challenges, and helped patients access their medicine more than 94 million times.
  • The Sarah Cannon Research Institute joint venture announced a collaboration with AstraZeneca aimed at advancing innovative technology and operational synergies to enhance the delivery of oncology clinical trials.
• McKesson launched a pilot initiative aimed at advancing health equity in underserved communities. Avondale, Ohio was selected as the first activation site to support access to essential pharmacy services and help tackle healthcare disparities.
• McKesson received three awards and recognitions.
  • Named by Fortune as one of America’s Most Innovative Companies.
  • Recognized by Newsweek as one of America's Greatest Workplaces for Women in 2024.
  • Recognized by DiversityComm Media as a 2024 Best of the Best Top Women Employer.

U.S. Pharmaceutical Segment

Fourth Quarter

• Revenues were $68.8 billion, an increase of 12%, driven by increased prescription volumes, including higher volumes from specialty products, retail national account customers, and GLP-1 medications.
• Segment Operating Profit was $1.1 billion. Adjusted Segment Operating Profit was $901 million, an increase of 5%, driven by growth in the distribution of specialty products to providers and health systems and increased contributions from our generics program.

Full Year

• Revenues were $278.7 billion, an increase of 16%, driven by increased prescription volumes, including higher volumes from specialty products, retail national account customers, and GLP-1 medications.
• Segment Operating Profit was $2.8 billion. Adjusted Segment Operating Profit was $3.3 billion, an increase of 7%, driven by growth in the distribution of specialty products to providers and health systems and increased contributions from our generics program.

Prescription Technology Solutions Segment

Fourth Quarter

• Revenues were $1.2 billion, flat to the prior year, driven by growth in the technology services business, offset by lower contributions from the third-party logistics business.
• Segment Operating Profit was $188 million. Adjusted Segment Operating Profit was $212 million, a decrease of 3%, driven by higher investments and expenses to support future growth across the biopharma services platform.

Full Year

• Revenues were $4.8 billion, an increase of 9%, driven by increased prescription volumes in the technology services and third-party logistics businesses.
• Segment Operating Profit was $835 million. Adjusted Segment Operating Profit was $837 million, an increase of 23%, driven by higher demand for access solutions, principally prior authorization services led by increased prescription volumes.

Medical-Surgical Solutions Segment

Fourth Quarter

• Revenues were $2.8 billion, an increase of 6%, driven by growth in the primary and extended care businesses, including higher volumes of illness season testing, partially offset by lower contribution from kitting, storage, and distribution of ancillary supplies for the U.S. government’s COVID-19 vaccine program.
• Segment Operating Profit was $213 million. Adjusted Segment Operating Profit was $248 million, flat to the prior year, driven by lower contribution from kitting, storage, and distribution of ancillary supplies for the U.S. government’s COVID-19 vaccine program, offset by growth in the primary and extended care businesses, including higher volumes of illness season testing.

Full Year

• Revenues were $11.3 billion, an increase of 2%, driven by growth in the primary and extended care businesses, partially offset by lower contribution from kitting, storage, and distribution of ancillary supplies for the U.S. government’s COVID-19 vaccine program.
• Segment Operating Profit was $952 million. Adjusted Segment Operating Profit was $1.0 billion, a decrease of 12%, driven by lower contribution from kitting, storage, and distribution of ancillary supplies for the U.S. government’s COVID-19 vaccine program, partially offset by growth in the primary and extended care businesses.

International Segment

Fourth Quarter

• Revenues were $3.5 billion, an increase of 6%, driven by higher pharmaceutical distribution volumes in the Canadian business.
• Segment Operating Profit was $70 million. Adjusted Segment Operating Profit was $94 million, an increase of 18%, driven by higher pharmaceutical distribution volumes in the Canadian business.

Full Year

• Revenues were $14.1 billion, a decrease of 31%, driven by Fiscal 2023 divestitures within McKesson’s European business.
• Segment Operating Profit was $319 million. Adjusted Segment Operating Profit was $378 million, a decrease of 24%, driven by Fiscal 2023 divestitures within McKesson’s European business.

Fiscal 2025 Outlook

McKesson does not provide forward-looking guidance on a GAAP basis as the Company is unable to provide a quantitative reconciliation of forward-looking Non-GAAP measures to the most directly comparable forward-looking GAAP measure, without unreasonable effort. McKesson cannot reasonably forecast LIFO inventory-related adjustments, certain litigation loss and gain contingencies, restructuring, impairment and related charges, and other adjustments, which are difficult to predict and estimate. These items are generally uncertain and depend on various factors, many of which are beyond the company’s control, and as such, any associated estimate and its impact on GAAP performance could vary materially.

McKesson continues its focused execution on company priorities, leveraging its assets and capabilities to drive sustainable growth. McKesson anticipates Fiscal 2025 Adjusted Earnings per Diluted Share of $31.25 to $32.05 reflecting continued operating momentum, a strong financial position, and a balanced approach to capital deployment.

Additional modeling considerations will be provided in the earnings call presentation.

Conference Call Details

McKesson has scheduled a conference call for today, Tuesday, May 7th at 4:30 PM ET to discuss the company’s financial results. The audio webcast of the conference call will be available live and archived on McKesson’s Investor Relations website at investor.mckesson.com.

Upcoming Investor Event

McKesson management will be participating in the following investor conference:

• BofA Securities 2024 Healthcare Conference, May 16, 2024

The audio webcast, and a complete listing of upcoming events for the investment community, including details and updates, will be available on McKesson’s Investor Relations website.

Non-GAAP Financial Measures

GAAP refers to the U.S. generally accepted accounting principles. This press release includes GAAP financial measures as well as Non-GAAP financial measures, including Adjusted Gross Profit, Adjusted Operating Expenses, Adjusted Other Income, Adjusted Interest Expense, Adjusted Income Tax Expense, Adjusted Earnings, Adjusted Earnings per Diluted Share, Adjusted Segment Operating Profit, Adjusted Segment Operating Profit Margin, Adjusted Corporate Expenses, Adjusted Operating Profit, FX-Adjusted results and Free Cash Flow which are financial measures not calculated in accordance with GAAP. Refer to the Supplemental Non-GAAP Financial Information section of the accompanying financial statement tables for the definitions and usefulness of the Company’s Non-GAAP financial measures and the attached schedules for reconciliations of the differences between the Non-GAAP financial measures and their most directly comparable GAAP financial measures.

Cautionary Statements

This earnings release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by their use of terminology such as believes, expects, anticipates, may, will, should, seeks, approximately, intends, projects, plans, estimates, targets, or the negative of these words or other comparable terminology. The discussion of financial outlook, guidance, trends, strategy, plans, assumptions, expectations, commitments, intentions, and the potential impact of new relationships or initiatives may also include forward-looking statements. Readers should not place undue reliance on forward-looking statements, such as financial performance forecasts, which speak only as of the date they are first made. Except to the extent required by law, we undertake no obligation to update or revise our forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, or implied. Although it is not possible to predict or identify all such risks and uncertainties, we encourage investors to read the risk factors described in our publicly available filings with the Securities and Exchange Commission and news releases.

These risk factors include, but are not limited to: we experience costly and disruptive legal disputes and settlements, including regarding our role in distributing controlled substances such as opioids; we might experience losses not covered by insurance or indemnification; we are subject to frequently changing, extensive, complex, and challenging healthcare and other laws; we from time to time record significant charges from impairment to goodwill, intangibles, and other long-lived assets; we experience cybersecurity incidents that might significantly compromise our technology systems or might result in material data breaches; we may be unsuccessful in achieving our strategic growth objectives; we are impacted by customer purchase reductions, contract non-renewals, payment defaults, and bankruptcies; our contracts with government entities involve future funding and compliance risks; we might be harmed by changes in our relationships or contracts with suppliers; our use of third-party data is subject to limitations that could impede the growth of our data services business; we might be adversely impacted by healthcare reform such as changes in pricing and reimbursement models; we might be adversely impacted by competition and industry consolidation; we are adversely impacted by changes or disruptions in product supply and have had difficulties in sourcing or selling products due to a variety of causes; we might be adversely impacted as a result of our distribution of generic pharmaceuticals; we might be adversely impacted by changes in the economic environments in which we operate; changes affecting capital and credit markets might impede access to credit, increase borrowing costs, and disrupt banking services for us and our customers and suppliers and might impair the financial soundness of our customers and suppliers; we might be adversely impacted by changes in tax legislation or challenges to our tax positions; we might be adversely impacted by events outside of our control, such as widespread public health issues, natural disasters, political events and other catastrophic events; we may be adversely affected by global climate change or by legal, regulatory, or market responses to such change; and governance issues and regulations, including those related to social issues, climate change, and sustainability, and stakeholder response thereto may have an adverse effect on our business, financial condition, and results of operations and damage our reputation.

About McKesson Corporation

McKesson Corporation is a diversified healthcare services leader dedicated to advancing health outcomes for patients everywhere. Our teams partner with biopharma companies, care providers, pharmacies, manufacturers, governments, and others to deliver insights, products and services to help make quality care more accessible and affordable. Learn more about how McKesson is impacting virtually every aspect of healthcare at McKesson.com and read Our Stories.

Tables and full text of earnings release also available for viewing and download in PDF format: McKesson Reports Fiscal 2024 Fourth-Quarter Results (PDF, 431 KB).

¹ See below under "Fiscal 2025 Outlook" for full explanation
² Reflects continuing operations attributable to McKesson, net of tax
³ Adjusted results in this earnings release are non-GAAP financial measures; refer to the accompanying definitions, reconciliation schedules, and Schedule 2