McKesson Reports Strong Q4 and FY2025 Financial Results, Issues Robust FY2026 Guidance, and Announces Intent to Spin Off Medical-Surgical Solutions Segment
McKesson Corporation (NYSE: MCK) has reported impressive financial results for the fourth quarter and full fiscal year ended March 31, 2025, reflecting continued growth and strategic execution across its core business areas. Alongside the earnings report, the company also outlined its fiscal 2026 guidance and revealed plans to spin off its Medical-Surgical Solutions segment into a standalone entity, signaling a sharpened focus on high-growth sectors such as oncology and biopharma services.
Q4 and Full-Year Fiscal 2025 Highlights
McKesson posted consolidated revenues of $90.8 billion for the fourth quarter of fiscal 2025, representing a 19% increase compared to the same period last year. The company also saw a significant boost in profitability, with earnings per diluted share (EPS) reaching $10.01, up by $3.99 year-over-year. On an adjusted basis, EPS was $10.12, marking a 64% increase and underscoring the strength of McKesson’s operating leverage and tax efficiencies.
For the full fiscal year, the company reported consolidated revenues of $359.1 billion, up 16% from fiscal 2024. Full-year EPS came in at $25.72, an increase of $3.33, while adjusted EPS was $33.05, reflecting 20% year-over-year growth. McKesson generated $6.1 billion in cash from operations and $5.2 billion in free cash flow, which supported $3.5 billion in shareholder returns, including $3.1 billion in share repurchases and $345 million in dividend payments.
CEO Brian Tyler highlighted the company’s continued outperformance: “McKesson delivered strong fourth quarter performance reporting revenue growth of 19% and Adjusted Earnings per Diluted Share growth of 64%. This marks another year of strong financial results, above our long-term targets, underpinned by operational execution against our strategic priorities.”
Tyler emphasized that the results were driven by a combination of factors, including the resilience of McKesson’s pharmaceutical distribution segment, expansion of its oncology business, and ongoing success in biopharma solutions. “The strength of our core pharmaceutical distribution business, expansion of our Oncology platform, and continued growth of our differentiated biopharma solutions businesses led to strong results,” he said.
FY2026 Guidance: Continued Growth Trajectory
Looking ahead, McKesson is initiating fiscal 2026 adjusted EPS guidance in the range of $36.75 to $37.55. This reflects an anticipated 11% to 14% growth over fiscal 2025. Excluding gains from McKesson Ventures’ equity investments in fiscal 2025, the company expects an even stronger adjusted EPS growth rate of 13% to 16%.
McKesson also reaffirmed its long-term adjusted EPS growth target of 12% to 14% annually. In addition, the company updated its long-term adjusted segment operating profit growth target for its U.S. Pharmaceutical segment, increasing the range from 5%–7% to 6%–8%, signaling confidence in continued volume growth and specialty distribution.
Strategic Portfolio Move: Medical-Surgical Solutions Separation
In a significant strategic shift, McKesson announced its intention to separate its Medical-Surgical Solutions segment into a new independent company (“NewCo”). The move aligns with McKesson’s ongoing focus on portfolio optimization and is designed to allow each company to concentrate on distinct growth trajectories and capital allocation strategies.
“Disciplined capital deployment and portfolio management are hallmarks of our strategy,” said Tyler. “This action is designed to unlock significant value for both McKesson and Medical-Surgical Solutions, as each focuses on maximizing growth and delivering operational excellence in their respective markets.”
The proposed separation is intended to create two focused, well-capitalized entities, with McKesson continuing to target high-growth opportunities in oncology and biopharma, while NewCo will specialize in medical-surgical supply distribution and solutions, particularly across alternate sites of care.
NewCo is expected to emerge as a differentiated player in the healthcare supply chain space with strong market positions and attractive margin profiles. McKesson believes the separation will provide both companies with enhanced strategic flexibility, improved capital allocation, and a clearer focus on their respective customer bases.
The company has not yet disclosed specific timing or structure for the transaction but confirmed that it is committed to pursuing a separation that maximizes shareholder value and will provide additional details as the process advances.
Segment Highlights
U.S. Pharmaceutical
The U.S. Pharmaceutical segment remains McKesson’s largest and most profitable division. For the fourth quarter, revenues rose 21% to $83.2 billion, driven by increased prescription volumes and specialty pharmaceutical distribution, particularly in oncology. Adjusted segment operating profit rose 17% to $1.1 billion.
Full-year revenues in this segment reached $327.7 billion, up 18%, while adjusted segment operating profit rose 12% to $3.7 billion.
Prescription Technology Solutions
Prescription Technology Solutions continues to be a growth engine for McKesson. Q4 revenues increased 13% to $1.3 billion, and adjusted segment operating profit climbed 34% to $285 million, driven by high demand for access and affordability solutions.
For the full year, the segment generated $5.2 billion in revenue, up 9%, with adjusted operating profit growing 15% to $1.0 billion.
Medical-Surgical Solutions
Ahead of its planned spin-off, the Medical-Surgical Solutions segment reported modest revenue growth of 1% for both the quarter ($2.9 billion) and full year ($11.4 billion). Despite flat revenue, profitability improved, with Q4 adjusted segment operating profit up 15% to $285 million and full-year profit flat at $1.0 billion. Growth was driven by operational efficiencies and cost optimization, despite headwinds in the primary care channel.
International
The International segment posted mixed results. Q4 revenues declined 2% to $3.5 billion due to the sale of Canadian assets Rexall and Well.ca. However, adjusted segment operating profit grew 9% to $102 million due to improved pharmaceutical distribution volumes in Canada.
For the year, the segment delivered $14.7 billion in revenue, up 4%, and $428 million in adjusted operating profit, marking a 13% increase.
Strategic Acquisitions Bolster Biopharma and Oncology Offerings
In fiscal 2025, McKesson made several key acquisitions to reinforce its presence in the oncology and biopharma markets. In August 2024, the company announced plans to acquire a controlling interest in Florida Cancer Specialists & Research Institute LLC’s Core Ventures. The deal is expected to close by June 2025.
In April 2025, McKesson completed its acquisition of an 80% controlling interest in PRISM Vision Holdings, LLC, a leading provider of ophthalmology and retina care services. These investments are part of McKesson’s strategy to expand its specialty care platform and provide integrated solutions across the care continuum.
The company also reported that its biopharma platform helped patients save over $10 billion on medications, prevented 12 million prescription abandonments, and enabled access to medicines over 100 million times—a testament to its growing influence in healthcare affordability and access.
A Path Forward
As McKesson heads into fiscal 2026, its leadership team remains confident in the company’s strategy, backed by consistent performance, strong cash flow generation, and a commitment to capital discipline. The planned spin-off of the Medical-Surgical Solutions business further exemplifies McKesson’s focus on creating value by doubling down on core growth areas like oncology and technology-enabled pharmaceutical services.
With updated long-term growth targets, a diversified portfolio, and strong fundamentals, McKesson appears well-positioned to continue delivering value for patients, partners, and shareholders alike.
