Cencora Q1 Revenue Rises 5.5% to $85.9B, Raises Operating Income Guidance
Cencora reported Q1 fiscal 2026 revenue of $85.9B, up 5.5% YoY, with adjusted EPS of $4.08, a 9.4% increase from prior year, and GAAP EPS of $2.87. It raised adjusted operating income growth guidance to 11.5%-13.5%, citing the completed OneOncology acquisition and segment margin gains.
1. Q1 Earnings Beat and Revenue Performance
Cencora reported fiscal 2026 first quarter adjusted EPS of $4.08, surpassing consensus estimates by $0.05 and marking a 9.4% year-over-year increase from $3.73. Revenue reached $85.93 billion, up 5.5% from the prior year and essentially in line with analysts’ forecasts of $86.03 billion. Growth was driven by a 5.0% increase in the U.S. Healthcare Solutions segment and a 9.6% rise in International Healthcare Solutions, reflecting strong demand for specialty medicines and expanded European distribution operations.
2. Gross Margin Expansion and Profitability
Gross profit for the quarter totaled $3.10 billion, a 20.1% increase over the prior year, while gross margin improved by 44 basis points to 3.58%. The margin uplift was fueled by higher profitability in the U.S. Healthcare Solutions segment—boosted by contributions from the January 2025 acquisition of Retina Consultants of America—and a favorable LIFO inventory credit. Operating income increased 7.7% to $760.4 million, with operating margin edging up to 0.88%. On a non-GAAP basis, operating income rose 11.9% to $1.10 billion, representing a 1.24% margin.
3. Raised Full-Year Sales Guidance
Building on first quarter momentum, Cencora lifted its fiscal 2026 sales growth outlook from 5%–7% to 7%–9%, and increased its full-year revenue guidance range to $343.79 billion–$350.22 billion, above the prior consensus of $341.04 billion. The company maintained its adjusted EPS target of $17.45–$17.60, citing contributions from the recently completed OneOncology acquisition and ongoing strength in specialty pharmacy and GLP-1 therapy distribution.
4. Segment Highlights and Strategic Outlook
Within the U.S. Healthcare Solutions segment, revenue of $76.2 billion grew 5.0% on higher unit volumes of specialty products and GLP-1 therapies, offset slightly by the loss of select customer contracts. International Healthcare Solutions delivered $7.6 billion in revenue, up 9.6%, led by robust performance in European distribution channels. Cencora reiterated its focus on pharmaceutical-centrism and specialty services, emphasizing integration of OneOncology to deepen its provider network and capture incremental margin opportunities.