
Table of Contents

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 ~~September 30~~December 31, 2025


☐			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: 1-11373

Cardinal Health, Inc.

(Exact name of registrant as specified in its charter)

Ohio

31-0958666

(State or other jurisdiction of
incorporation or organization)

(IRS Employer
Identification No.)

7000 Cardinal Place

Dublin

Ohio

43017

(Address of principal executive offices)

(Zip Code)

(614) 757-5000

(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 each exchange on which registered
Common shares (without par value)	CAH	New York Stock Exchange

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 ☑ þ No ☐ o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ þ No ☐ o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth 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 ☑ þ

The number of the registrant’s common shares, without par value, outstanding as of ~~October~~January 2431, ~~2025~~2026, was the following: ~~237~~235,~~595~~316,~~042~~016.

Cardinal Health Q1Q2 Fiscal 2026 Form 10-Q

Table of Contents

						Page
			Management's Discussion and Analysis of Financial Condition and Results of Operations			2
			Explanation and Reconciliation of Non-GAAP Financial Measures			13
			Quantitative and Qualitative Disclosures about Market Risk			16
			Controls and Procedures			16
			Legal Proceedings			17
			Risk Factors			17
			Unregistered Sales of Equity Securities and Use of Proceeds			1817
			Financial Statements			19
			Other Information			17
			Exhibits			38
			Financial Statements			18
			Form 10-Q Cross Reference Index			39
			Exhibits			39
			Signatures			40
			Form 10-Q Cross Reference Index			40
			Signatures			41

About Cardinal Health

Cardinal Health, Inc., an Ohio corporation formed in 1979, is a global healthcare services and products company providing customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories, physician offices, and patients in the home. We provide pharmaceuticals and medical products and cost-effective solutions that enhance supply chain efficiency. We connect patients, providers, payers, pharmacists, and manufacturers for integrated care coordination.

We report our financial results in two reportable segments: Pharmaceutical and Specialty Solutions ("Pharma") segment and Global Medical Products and Distribution ("GMPD") segment. All remaining operating segments that are not significant enough to require separate reportable segment disclosures are included in Other, which is comprised of Nuclear and Precision Health Solutions, at-Home Solutions, and OptiFreight® Logistics. As used in this report, “we,” “our,” “us,” and similar pronouns refer to Cardinal Health, Inc. and its majority-owned and consolidated subsidiaries, unless the context requires otherwise. Our fiscal year ends on June 30. References to fiscal 2026 and fiscal 2025 and to FY26 and FY25 are to the fiscal years ending or ended June 30, 2026 and June 30, 2025, respectively.

Forward-Looking Statements

This Quarterly Report on Form 10-Q for the quarter ended ~~September~~December 3031, 2025 (this "Form 10-Q") (including ~~any~~ information incorporated by reference) includes "forward-looking statements" addressing expectations, prospects, estimates, and other matters that are dependent upon future events or developments. Many forward-looking statements appear in Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"), but there are others in this Form 10-Q, which may be identified by words such as "“expect,"” "“anticipate,"” "“intend,"” "“plan,"” "“believe,"” "“will,"” "“should,"” "“could,"” "“would,"” "“project,"” "“continue,"” "“likely,"” and similar expressions, and include statements reflecting future results or guidance, statements of outlook, and expense accruals. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those made, projected, or implied. The most significant of these risks and uncertainties are described in this Form 10-Q, including Exhibit 99.1, and in "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (“2025 Form 10-K”), our Form 10-Q for the quarter ended September 30, 2025, and other SEC filings made since June 30, 2025. Forward-looking statements in this Form 10-Q speak only as of the date of this document. Except to the extent required by applicable law, we undertake no obligation to update or revise any forward-looking statement.

Non-GAAP Financial Measures

In the "Overview of Consolidated Results" section of MD&A, we use financial measures that are derived from our consolidated financial data but are not presented in our condensed consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). These measures are considered "non-GAAP financial measures" under the Securities and Exchange Commission ("SEC") rules. The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures are included in the “Explanation and Reconciliation of Non-GAAP Financial Measures” section following MD&A in this Form 10-Q.

1 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q 1


MD&A			Overview

Management's Discussion and Analysis of Financial Condition and Results of Operations

The discussion and analysis presented below is concerned with material changes in financial condition and results of operations, including amounts and certainty of cash flows from operations and from outside sources, between the periods specified in our condensed consolidated balance sheets at ~~September~~December 3031, 2025 and June 30, 2025, and in our condensed consolidated statements of earnings and our condensed consolidated statements of cash flows for the three and six months ended ~~September~~December 3031, 2025 and 2024. All comparisons presented are with respect to the prior-year period, unless stated otherwise. The discussion and analysis in this Form 10-Q should be read in conjunction with the MD&A included in our 2025 Form 10-K.

2 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q


MD&A			Overview

Overview of Consolidated Results

Revenue

Revenue for the three and six months ended ~~September~~December 3031, 2025 increased 2219 percent to $6465.06 billion and 21 percent to $129.6 billion from the comparative prior-year ~~quarter~~periods, respectively, primarily due to branded and specialty pharmaceutical sales growth from existing and new customers.

GAAP and Non-GAAP Operating Earnings

	Three Months Ended September 30,
	Three Months Ended December 31,						Six Months Ended December 31,
(in millions)	2025		2024		Change		2025		2024		Change
GAAP operating earnings	$	~~668~~707	$	~~568~~549	1829	%	$	1,375	$	1,117	23	%
Restructuring and employee severance	20		24
State opioid assessment related to prior fiscal years	(17)		—				(17)		—
Amortization and other acquisition-related costs	104		74
Restructuring and employee severance	21		9				41		33
Acquisition-related cash and share-based compensation costs	64		—
Amortization and other acquisition-related costs	130		105				234		179
Impairments and (gain)/loss on disposal of assets, net	2		(1)
Acquisition-related cash and share-based compensation costs	67		—				131		—
Litigation (recoveries)/charges, net	—		(40)
Impairments and (gain)/loss on disposal of assets, net	(14)		3				(12)		2
Non-GAAP operating earnings	$	857	$	625	37	%
Litigation (recoveries)/charges, net	(18)		(31)				(18)		(71)
Non-GAAP operating earnings	$	877	$	635	38	%	$	1,734	$	1,260	38	%

The sum of the components and certain computations may reflect rounding adjustments.

GAAP operating earnings for the three and six months ended ~~September~~December 3031, 2025 increased 1829 percent to $~~668~~ 707 million and 23 percent to $1.4 billion from the comparative prior-year ~~quarter~~periods, respectively, primarily due to the impact of the ~~acquisition~~acquisitions of management services organization ("MSO") platforms and ~~the acquisition of~~ Advanced Diabetes Supply Group ("ADS"), ~~and~~ increased contribution from branded and specialty pharmaceutical products, and growth from existing customers within the GMPD segment, partially offset by acquisition-related cash and share-based compensation costs.

Non-GAAP operating earnings for the three and six months ended ~~September~~December 3031, 2025 increased 3738 percent to $~~857~~877 million and to $1.7 billion from the comparative prior-year ~~quarter~~periods, respectively, primarily due to the impact of the ~~acquisition~~acquisitions of MSO platforms and ~~the acquisition of~~ ADS, increased contribution from branded and specialty pharmaceutical products, and growth from existing customers within the GMPD segment.

GAAP and Non-GAAP Diluted EPS

	Three Months Ended September 30,
	Three Months Ended December 31,						Six Months Ended December 31,
($ per share)	2025 (2)		2024 (2)		Change		2025 (2)		2024 (2)		Change
GAAP diluted EPS (1)	$	1.8897	$	1.7065	1119	%	$	3.85	$	3.35	15	%
Restructuring and employee severance	0.06		0.07
State opioid assessment related to prior fiscal years	(0.05)		—				(0.05)		—
Amortization and other acquisition-related costs	0.31		0.22
Restructuring and employee severance	0.07		0.03				0.13		0.10
Acquisition-related cash and share-based compensation costs	0.26		—
Amortization and other acquisition-related costs	0.46		0.32				0.78		0.54
Litigation (recoveries)/charges, net	0.03		(0.11)
Acquisition-related cash and share-based compensation costs	0.27		—				0.53		—
Non-GAAP diluted EPS (1)	$	2.55	$	1.88	36	%
Impairments and (gain)/loss on disposal of assets, net	(0.06)		0.01				(0.03)		0.01
Litigation (recoveries)/charges, net	(0.04)		(0.08)				(0.02)		(0.19)
Non-GAAP diluted EPS (1)	$	2.63	$	1.93	36	%	$	5.18	$	3.81	36	%

The sum of the components and certain computations may reflect rounding adjustments.

(1) Diluted earnings per share attributable to Cardinal Health, Inc. ("diluted EPS").

(2) The reconciling items are presented within this table net of tax. See quantification of tax effect of each reconciling item in our GAAP to Non-GAAP Reconciliations in the "Explanation and Reconciliation of Non-GAAP Financial Measures."

~~For~~GAAP diluted EPS for the three and six months ended ~~September~~December 3031, 2025, ~~GAAP and non-GAAP diluted EPS~~ increased 1119 percent to $1.8897 and 3615 percent to $23.~~55,~~85 ~~respectively,~~ from the comparative prior-year ~~quarter~~periods, respectively, primarily due to the factors impacting GAAP operating earnings discussed in the preceding section, partially offset by increased interest expense.

3 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q 3


MD&A			Overview

Non-GAAP diluted EPS for the three and six months ended December 31, 2025 increased 36 percent to $2.63 and $5.18 from the comparative prior-year periods, respectively, primarily due to the factors impacting non-GAAP operating earnings discussed in the preceding section, partially offset by increased interest expense.

Significant Developments in Fiscal 2026 and Trends

Pharmaceutical and Specialty Solutions Segment

Solaris Health Acquisition

On ~~August~~November 123, 2025, we ~~announced that we~~, through ~~the~~The Specialty Alliance, ~~have~~completed ~~entered~~the ~~into~~acquisition aof ~~definitive~~Solaris ~~agreement~~Health, toa ~~acquire~~urology ~~Solaris~~MSO, ~~Health~~ for a purchase price of approximately $1.9 billion in cash, subject to certain adjustments. ~~Solaris Health is the country's leading urology MSO and supports more than 750 providers across more than 250 practice locations in 14 states.~~ In connection with the closing of this transaction, we ~~will~~issued ~~issue~~ common units in ~~the~~The Specialty Alliance to certain physicians and members of management which are estimated to have a grant date fair value of approximately $500 million, a portion of which will be recognized as post-combination expense within acquisition-related cash and share-based compensation costs. ~~We consolidate the results of the Specialty Alliance in our consolidated financial statements and report those consolidated results within our Pharma segment.~~

WeSolaris ~~intend~~Health toincludes ~~finance~~more than 750 providers across more than 250 practice locations in 14 states. Solaris Health is part of The Specialty Alliance, our multi-specialty MSO platform, and their results are reported within our Pharma segment. With the closing of this transaction, we own approximately 76% of The Specialty Alliance. We funded the acquisition with a combination of cash proceeds from the recent debt financing and cash on hand. See Note 5 of the "Notes to Condensed Consolidated Financial Statements" for additional information on the debt financing.

Management Service Organization Platforms

The performance of our MSO platforms, which consists of ~~the~~The Specialty Alliance and Navista, positively impacted the year-over-year comparison of Pharma segment profit during the three and six months ended ~~September~~December 3031, 2025, primarily due to the impact of the acquisitions of GI Alliance ("GIA"), Urology America, ~~and~~ Integrated Oncology Network ("ION") and Solaris Health. The Specialty Alliance is our multi-specialty MSO platform, which is primarily comprised of GIA, Urology America, Solaris Health and other gastroenterology- and urology-focused practices. Navista is our oncology MSO platform, which is primarily comprised of ION and other oncology-focused practices. Our ability to successfully provide physician practice support and management services, and to receive the value we expect to receive from our recent acquisitions of MSO platforms, depends upon a number of factors, including: the ability to develop or acquire and integrate appropriate practice management and support expertise; the ability to support recruitment, integration, and retention of sufficient numbers of local providers and staff; ensuring the alignment of interests between Cardinal Health and the physicians; the ability to successfully support negotiations with vendors, suppliers, and payors; the reimbursement and regulatory environment; and competition from other healthcare organizations.

Branded Pharmaceuticals

During the three and six months ended ~~September~~December 3031, 2025, we saw increased demand for GLP-1 pharmaceuticals and our sales increased significantly. These increased sales positively impacted our Pharma segment and consolidated revenue for the three and six months ended ~~September~~December 3031, 2025; however, increased GLP-1 sales did not meaningfully contribute to segment profit. Future demand for these medications is unpredictable and our ability to meet demand may be impacted by supply constraints. Additionally, the recently issued Executive Order titled “Delivering Most-Favored Nation Prescription Drug Pricing to American Patients” may impact sales or profitability of branded pharmaceutical products~~, including GLP-1 products~~; however, the extent of the impact is uncertain and may vary depending on the timeline for implementation and the extent of any price reductions. It is also possible that the adoption of the One Big Beautiful Bill Act ("OBBBA") could reduce participation in Medicare and Medicaid programs, resulting in a change in utilization of the healthcare system. This may adversely affect demand for our products and services; however, the extent of any reduction is unpredictable.

Generics Program

The performance of our Pharma segment generics program positively impacted the year-over-year comparison of Pharma segment profit during the three and six months ended ~~September~~December 3031, 2025. The Pharma segment generics program includes, among other things, the impact of generic pharmaceutical product launches, customer volumes, pricing changes, the Red Oak Sourcing, LLC venture ("Red Oak Sourcing") with CVS Health Corporation ("CVS Health"), and generic pharmaceutical contract manufacturing and sourcing costs.

The frequency, timing, magnitude, and profit impact of generic pharmaceutical customer volumes, pricing changes, customer contract renewals, generic pharmaceutical manufacturer pricing changes, and generic pharmaceutical contract manufacturing and sourcing costs all impact Pharma segment profit and are subject to risks and uncertainties. These risks and uncertainties may impact Pharma segment profit and consolidated operating earnings during the remainder of fiscal 2026 and beyond.

4 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q


MD&A			Overview

Global Medical Products and Distribution Segment

Volumes

We experienced Cardinal Health brand medical products sales growth during the three months ended September 30, 2025 and expect further growth during the remainder of fiscal 2026 and beyond. The timing, magnitude, and profit impact of this anticipated sales growth is subject to risks and uncertainties, which may impact GMPD segment profit.

Tariffs

Recent U.S. tariffs imposed or threatened to be imposed on goods, materials, and products imported into the United States from countries where we do business and any retaliatory ~~or responsive~~ actions taken by such countries have resulted in us incurring substantial additional costs to source products and materials, directly and indirectly, from affected countries, ~~and~~resulting ~~are~~in ~~requiring~~raising ~~us to raise~~ prices on certain products and ~~seek~~evaluating alternative sources of supply. It is also possible that we could experience supply disruptions or shortages as a result of tariffs or other protective measures.

We have taken action to reduce the potential impact of tariffs on our costs; however, at this time, the countries that will be subject to tariffs and the tariff rate that may be imposed on each country isremains ~~uncertain and~~ dynamic and we do not expect to be able to establish alternative sources of supply or otherwise mitigate the potential impact of tariffs on all of the products that we source, manufacture, or distribute. If we are not able to offset the impact of tariffs through price increases or otherwise mitigate the impacts, our financial results could be negatively impacted. Additionally, if tariffs are modified in the future, or our preliminary information is incorrect regarding their impact, we may not be able to respond to such changes adequately or in a timely manner and our financial results could be negatively impacted. Furthermore, if our competitors do not increase prices, or increase prices to a lesser extent than we do, or are able to offset the impact of tariffs through other actions, our competitive and financial position may be adversely affected.

5 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q 5


MD&A			Results of Operations

Results of Operations

Revenue

	Three Months Ended September 30,
	Three Months Ended December 31,						Six Months Ended December 31,
(in millions)	2025		2024		Change		2025		2024		Change
Pharmaceutical and Specialty Solutions	$	5960,~~205~~669	$	4750,~~990~~849	2319	%	$	119,874	$	98,839	21	%
Global Medical Products and Distribution	3,~~184~~259		3,~~123~~154		23	%	6,443		6,277		3	%
Other	1,~~641~~724		1,~~186~~283		3834	%	3,365		2,469		36	%
Total segment revenue	6465,~~030~~652		5255,~~299~~286		2219	%	129,682		107,585		21	%
Corporate	(2125)		(22)		N.M.		(46)		(44)		N.M.
Total revenue	$	6465,~~009~~627	$	5255,~~277~~264	2219	%	$	129,636	$	107,541	21	%

Pharmaceutical and Specialty Solutions

Pharma segment revenue for the three and six months ended December 31, 2025 increased 2319 percent to $5960.27 billion and 21 percent to $119.9 billion from the comparative prior-year ~~quarter~~periods, respectively, primarily due to branded and specialty pharmaceutical sales growth from existing and new customers.

Global Medical Products and Distribution

GMPD segment revenue for the three and six months ended December 31, 2025 increased 23 percent to $3.23 billion and $6.4 billion from the comparative prior-year ~~quarter~~periods, respectively, primarily due to volume growth from existing customers.

Other

Other segment revenue for the three and six months ended December 31, 2025 increased 3834 percent to $1.67 billion and 36 percent to $3.4 billion from the comparative prior-year ~~quarter~~periods, respectively, due to growth across at-Home Solutions (including the acquisition of ADS), Nuclear and Precision Health Solutions, and OptiFreight® Logistics.

Cost of Products Sold

Cost of products sold for the three and six months ended December 31, 2025 increased 2219 percent to $6163.72 billion and 20 percent to $124.9 billion from the comparative prior-year ~~quarter~~periods, respectively, primarily due to the factors affecting the changes in revenue and gross margin.

6 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q


MD&A			Results of Operations

Gross Margin

	Three Months Ended September 30,
	Three Months Ended December 31,						Six Months Ended December 31,
(in millions)	2025		2024		Change		2025		2024		Change
Gross margin	$	2,~~319~~397	$	1,~~902~~941	2223	%	$	4,716	$	3,843	23	%

Gross margin for the three and six months ended December 31, 2025 increased 2223 percent to $2.34 billion and $4.7 billion from the comparative prior-year ~~quarter~~periods, respectively, primarily due to the ~~acquisition~~acquisitions of MSO platforms and ~~the acquisition of~~ ADS and the increased contribution from branded ~~pharmaceutical~~ and specialty pharmaceutical products.

Gross margin ~~rate~~rates ~~was~~for ~~relatively~~the ~~flat~~three ~~compared~~and tosix ~~the~~months ~~prior-year~~ended ~~quarter~~December 31, ~~with~~2025 ~~impact~~grew of14 ~~the~~basis ~~unfavorable~~points ~~changes~~to in3.65 ~~product~~percent ~~mix~~and ~~for~~7 ~~the~~basis ~~Pharma~~points ~~segment~~to ~~mostly~~3.64 ~~offset~~percent byfrom the ~~beneficial~~comparative ~~gross~~prior-year ~~margin~~periods, ~~rates~~respectively, primarily due to the acquisition of MSO platforms, partially offset by the impact of the unfavorable changes in product mix for the Pharma segment. ~~The~~These changes in product mix were primarily driven by increased pharmaceutical distribution branded sales, which have a dilutive impact on our overall gross margin rate.

Distribution, Selling, General, and Administrative ("SG&A") Expenses

	Three Months Ended September 30,
	Three Months Ended December 31,						Six Months Ended December 31,
(in millions)	2025		2024		Change		2025		2024		Change
SG&A expenses	$	1,~~461~~504	$	1,~~277~~306	1415	%	$	2,965	$	2,583	15	%

SG&A expenses for the three and six months ended December 31, 2025 increased 1415 percent to $1.5 billion and $3.0 billion from the comparative prior-year ~~quarter~~periods, respectively, primarily due to the ~~inclusion~~acquisitions of ~~the acquisition of~~ MSO platforms and ~~the acquisition of~~ ADS.

7 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q 7


MD&A			Results of Operations

Segment Profit

We evaluate segment performance based on segment profit, among other measures. See Note 1 2 of the "Notes to Condensed Consolidated Financial Statements" for additional information on segment profit.

	Three Months Ended September 30,
	Three Months Ended December 31,						Six Months Ended December 31,
(in millions)	2025		2024		Change		2025		2024		Change
Pharmaceutical and Specialty Solutions	$	~~667~~687	$	~~530~~531	2629	%	$	1,354	$	1,061	28	%
Global Medical Products and Distribution	4637		818		N.M.		83		26		N.M.
Other	~~166~~179		~~104~~118		6052	%	345		222		55	%
Total segment profit	~~879~~903		~~642~~667		3735	%	1,782		1,309		36	%
Corporate	(~~211~~196)		(74118)		N.M.		(407)		(192)		N.M.
Total consolidated operating earnings	$	~~668~~707	$	~~568~~549	1829	%	$	1,375	$	1,117	23	%

Pharmaceutical and Specialty Solutions

Pharma segment profit for the three and six months ended December 31, 2025 increased 2629 percent to $~~667~~687 million and 28 percent to $1.4 billion from the comparative prior-year ~~quarter~~periods, respectively, primarily due to increased contribution from branded and specialty pharmaceutical products, the acquisition of MSO platforms, and the performance of our generics program.

Global Medical Products and Distribution

GMPD segment profit for the three and six months ended December 31, 2025 increased to $4637 million and $83 million from the comparative prior-year ~~quarter~~periods, respectively, primarily due to growth from existing customers. and the beneficial net impact of cost optimization initiatives, partially offset by the adverse net impact of tariffs.

Other

Other segment profit for the three and six months ended December 31, 2025 increased 6052 percent to $~~166~~179 million and 55 percent to $345 million from the comparative prior-year ~~quarter~~periods, respectively, primarily due to the performance of ~~all of~~ at-Home Solutions (including the acquisition of ADS), and OptiFreight® Logistics~~, and Nuclear and Precision Health Solutions~~.

Corporate

The changes in Corporate ~~during~~for the three and six months ended ~~September~~ 30December 31, 2025 were ~~are~~ due to the factors discussed in the "Other Components of Consolidated Operating Earnings" section that follows.

8 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q


MD&A			Results of Operations

Other Components of Consolidated Operating Earnings

In addition to revenue, gross margin, and SG&A expenses discussed previously, consolidated operating earnings were impacted by the following:

	Three Months Ended September 30,
	Three Months Ended December 31,				Six Months Ended December 31,
(in millions)	2025		2024		2025		2024
Restructuring and employee severance	$	2021	$	249	$	41	$	33
Amortization and other acquisition-related costs	~~104~~130		74105		234		179
Acquisition-related cash and share-based compensation costs	6467		—		131		—
Impairments and (gain)/loss on disposal of assets, net	2(14)		~~(1)~~3		(12)		2
Litigation (recoveries)/charges, net	—(18)		(4031)		(18)		(71)

Restructuring and Employee Severance

During the three and six months ended ~~September~~December 3031, 2025 ~~and 2024~~, restructuring and employee severance costs were primarily related to the implementation of certain enterprise-wide cost-savings measures and certain initiatives to rationalize our manufacturing operations.

Amortization and Other Acquisition-Related Costs

Amortization of acquisition-related intangible assets was $8784 million and $68171 million for the three and six months ended ~~September 30~~December 31, 2025, respectively, and $69 million and $137 million for the three and six months ended December 31, 2024, respectively.

Transaction and integration costs associated with acquisitions were $1746 million and $63 million for the three and six months ended ~~September 30~~December 31, 2025, respectively, and $36 million and $42 million for the three and six months ended December 31, 2024, respectively.

Acquisition-related ~~cash~~Cash and ~~share~~Share-based ~~compensation~~Compensation ~~costs~~Costs

Acquisition-related cash and share-based compensation costs were $6467 million and $131 million for the three and six months ended ~~September 30~~December 31, 2025, respectively, primarily resulting from the ~~acquisition~~acquisitions ofwithin ~~GIA~~The Specialty Alliance.

Litigation (Recoveries)/Charges, Net

~~During~~We ~~the three months ended September 30, 2024, we~~ recognized income ~~of $43 million~~ for net recoveries in class action antitrust ~~lawsuits~~litigation in which we were a class member or plaintiff of $19 million during both the three and six months ended December 31, 2025 and $16 million and $59 million during the three and six months ended December 31, 2024, respectively. We recognized $15 million in opioid-related insurance recoveries during the three and six months ended December 31, 2024.

Earnings Before Income Taxes

In addition to the items discussed above, earnings before income taxes ~~was~~were impacted by the following:

	Three Months Ended September 30,
	Three Months Ended December 31,					Six Months Ended December 31,
(in millions)	2025		2024		Change	2025		2024		Change
Other (income)/expense, net	$	(1011)	$	~~(5)~~3	N.M.	$	(21)	$	(2)	N.M.
Interest expense, net	8088		3235		N.M.	168		67		N.M.

Interest Expense, Net

Interest expense, net for the three and six months ended December 31, 2025 increased to $8088 million and $168 million from the comparative prior-year ~~quarter~~periods, respectively, primarily due to the additional debt financing for our recent acquisitions.

Provision for Income Taxes

~~During~~The effective tax rate was 25.2 percent and 21.4 percent for the three months ended ~~September 30~~ December 31, 2025 and 2024, ~~the~~respectively, ~~effective~~and ~~tax rate was~~ 24.17 percent and 2322.02 percent for the six months ended December 31, 2025 and 2024, respectively. See Note 7 of the “"Notes to Condensed Consolidated Financial Statements”" for additional information.

9 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q 9


MD&A			Liquidity and Capital Resources

Liquidity and Capital Resources

We currently believe that, based on available capital resources and projected operating cash flow, we have adequate capital resources to fund our operations and expected future cash needs as described below. In addition to those disclosed, if we decide to engage in one or more acquisitions, depending on the size and timing of such transactions, we may need to access capital markets for additional financing.

Cash and Equivalents

Our cash and equivalents balance was $42.68 billion at ~~September~~December 3031, 2025 compared to $3.9 billion at June 30, 2025.

During the ~~three~~six months ended ~~September~~December 3031, 2025, net cash provided by operating activities was $1.07 billion, which includes the impact of payments totaling $403 million related to the opioid litigation.

During the ~~three~~six months ended ~~September~~December 3031, 2025, we deployed $1.9 billion for the Solaris Health acquisition, $500 million for debt repayment, $~~375~~758 million for share repurchases, $~~129~~251 million for dividends, and $~~108~~239 million for capital expenditures. InWe ~~addition, we~~ issued new long-term debt and received net proceeds of approximately $1.0 billion to fund a portion of the consideration ~~payable~~paid in connection with the Solaris Health acquisition and for general purposes.

At ~~September~~December 3031, 2025, our cash and equivalents were held in cash depository accounts with major banks or invested in high quality, short-term liquid investments.

Changes in working capital, which impact operating cash flow, can vary significantly depending on factors such as the timing of customer payments, inventory purchases, payments to vendors, and tax payments in the regular course of business, as well as fluctuating working capital needs driven by customer and product mix.

The cash and equivalents balance at ~~September~~December 3031, 2025 ~~included~~includes $~~596~~505 million of cash held by subsidiaries outside of the United States.

Other Financing Arrangements and Financial Instruments

Credit Facilities and Commercial Paper

In addition to cash and equivalents and operating cash flow, other sources of liquidity at ~~September~~December 3031, 2025 include a $3.0 billion commercial paper program, backed by a $2.0 billion revolving credit facility that expires in February 2028 and a $1.0 billion 364-Day revolving credit facility that ~~expired~~expires in October ~~2025~~2026. We also have a $1.0 billion committed receivables sales facility through September 2028. At ~~September~~December 3031, 2025, we had no amounts outstanding under our commercial paper program, revolving credit ~~facility~~facilities, or our committed receivables sales facility.

In September 2025, we renewed our committed receivables sales facility program through Cardinal Health 23 Funding, LLC (“"CHF”") through September ~~28,~~ 2028.

In October 2025, we renewed the 364-Day revolving credit facility, under which we have access to $1.0 billion of committed liquidity through October 2026.

Our revolving credit and committed receivables sales facilities require us to maintain a consolidated net leverage ratio of no more than 3.75-to-1. As of ~~September 30~~December 31, 2025, we were in compliance with this financial covenant.

Long-Term Debt and Other Short-Term Borrowings

We had total long-term obligations, including the current portion and other short-term borrowings, of $9.0 billion and $8.5 billion at ~~September~~December 3031, 2025 and June 30, 2025, respectively.

In August 2025, we issued additional debt, with the aggregate principal amount of $1.0 billion, to fund a portion of the consideration payable in connection with the Solaris Health acquisition and for general purposes. The notes issued are $600 million aggregate principal amount of 4.5% Notes that mature on September 15, 2030 and $400 million aggregate principal amount of 5.15% Notes that mature on September 15, 2035. The proceeds of the notes issued, net of discounts, premiums, and debt issuance costs, were approximately $1.0 billion.

During the ~~three~~six months ended ~~September 30~~December 31, 2025, we repaid the full principal of $500 million of the 3.75% Notes due 2025 at maturity with available cash.

10 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q


MD&A			Liquidity and Capital Resources

Capital Deployment

Opioid Litigation Settlements

We had $4.3 billion accrued at ~~September~~December 3031, 2025 related to certain national opioid litigation settlements, as further described within Note 6 of the "Notes to Condensed Consolidated Financial Statements." We expect the majority of the remaining payment amounts to occur through 2038. During the ~~three~~six months ended ~~September~~December 3031, 2025, we made our fifth annual payment of $366 million under National Opioid Settlement Agreement ("the "NOSA") and other settlement payments of $37 million related to the opioid litigation. The amounts of future annual payments under the NOSA may differ from the payments that we have already made.

Capital Expenditures

Capital expenditures during the ~~three~~six months ended ~~September~~December 3031, 2025 and 2024 were $~~108~~239 million and $90189 million, respectively.

Dividends

On each of May 5, 2025, ~~and~~ August 15, 2025, and November 4, 2025, our Board of Directors approved a quarterly dividend of $0.5107 per share, or $2.04 per share on an annualized basis, which were paid on July 15, 2025, ~~and~~ October 15, 2025, and, January 15, 2026 to shareholders of record on July 1, 2025, ~~and~~ October 1, 2025, and January 2, 2026, respectively.

Share Repurchases

During the ~~three~~six months ended ~~September~~December 3031, 2025, we deployed $~~375~~ 750 million for repurchases of our common shares under an accelerated share repurchase ("ASR") ~~program~~programs. We funded the repurchases with available cash. ~~The ASR program will conclude by October 31, 2025 and reduce the amount remaining under our existing share repurchase authorization to less than $2.4 billion.~~ See Note 10 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

Solaris Health Acquisition

On ~~August~~November 123, 2025, we ~~announced that we~~, through ~~the~~The Specialty Alliance, ~~have~~completed ~~entered~~the ~~into~~acquisition aof ~~definitive agreement to acquire~~ Solaris Health, a urology MSO, for a purchase price of approximately $1.9 billion in cash, subject to certain adjustments. In connection with the closing of this transaction, we ~~will~~issued ~~issue~~ common units in ~~the~~The Specialty Alliance to certain physicians and management which are estimated to have a grant date fair value of approximately $500 million, a portion of which will be recognized as post-combination expense. See Note 2 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

11 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q 11


MD&A			Other Items

Other Items

The MD&A in the 2025 Form 10-K addresses our contractual obligations and cash requirements, as of and for the fiscal year ended June 30, 2025. Other than the considerations noted above in connection with the ~~planned~~Solaris Health acquisition and our debt issuance, there have been no subsequent material changes outside of the ordinary course of business to those items. See Note 2 and Note 5 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

Critical Accounting Policies and Sensitive Accounting Estimates

Critical accounting policies are those accounting policies that (i) can have a significant impact on our financial condition and results of operations and (ii) require the use of complex and subjective estimates based upon past experience and management’s judgment. Other people applying reasonable judgment to the same facts and circumstances could develop different estimates. Estimates are inherently uncertain, therefore actual results may differ, including due to the risks discussed in "Risk Factors" and other risks discussed in ~~the~~our 2025 Form 10-K and our other filings with the SEC since June 30, 2025. There have been no material changes to our critical accounting estimates since the filing of our 2025 Form 10-K.

12 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q


Explanation and Reconciliation of Non-GAAP Financial Measures

Explanation and Reconciliation of Non-GAAP Financial Measures

The "Overview of Consolidated Results" section within MD&A in this Form 10-Q contains financial measures that are not calculated in accordance with GAAP.

In addition to analyzing our business based on financial information prepared in accordance with GAAP, we use these non-GAAP financial measures internally to evaluate our performance, engage in financial and operational planning, and determine incentive compensation because we believe that these measures provide additional perspective on and, in some circumstances are more closely correlated to, the performance of our underlying, ongoing business. We provide these non-GAAP financial measures to investors as supplemental metrics to assist readers in assessing the effects of items and events on our financial and operating results on a year-over-year basis and in comparing our performance to that of our competitors. However, the non-GAAP financial measures that we use may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The non-GAAP financial measures disclosed by us should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements set forth below should be carefully evaluated.

Exclusions from Non-GAAP Financial Measures

Management believes it is useful to exclude the following items from the non-GAAP measures presented in this report for its own and for investors’ assessment of the business for the reasons identified below:

•LIFO charges and credits are excluded because the factors that drive last-in first-out ("LIFO") inventory charges or credits, such as pharmaceutical manufacturer price appreciation or deflation and year-end inventory levels (which can be meaningfully influenced by customer buying behavior immediately preceding our fiscal year-end), are largely out of our control and cannot be accurately predicted. The exclusion of LIFO charges and credits from non-GAAP metrics facilitates comparison of our current financial results to our historical financial results and to our peer group companies’ financial results. We did not recognize any LIFO charges or credits during the periods presented.

•State opioid assessments related to prior fiscal years is the portion of state assessments for prescription opioid medications that were sold or distributed in periods prior to the period in which the expense is incurred. This portion is excluded from non-GAAP financial measures because it is retrospectively applied to sales in prior fiscal years and inclusion would obscure analysis of the current fiscal year results of our underlying, ongoing business. Additionally, while states' laws may require us to make payments on an ongoing basis, the portion of the assessment related to sales in prior periods are contemplated to be one-time, nonrecurring items. Income from state opioid assessments related to prior fiscal years represents reversals of accruals due to changes in estimates or when the underlying assessments were invalidated by a Court or reimbursed by manufacturers.

•Restructuring and employee severance costs are excluded because they are not part of the ongoing operations of our underlying business and include, but are not limited to, costs related to divestitures, closing and consolidating facilities, changing the way we manufacture or distribute our products, moving manufacturing of a product to another location, changes in production or business process outsourcing or insourcing, employee severance, and realigning operations.

•Amortization and other acquisition-related costs, which include transaction costs, integration costs, and changes in the fair value of contingent consideration obligations, are excluded because they are not part of the ongoing operations of our underlying business and to facilitate comparison of our current financial results to our historical financial results and to our peer group companies' financial results. Additionally, costs for amortization of acquisition-related intangible assets and amortization as a result of basis differences in equity method investments are non-cash amounts, which are variable in amount and frequency and are significantly impacted by the timing and size of acquisitions, so their exclusion facilitates comparison of historical, current, and forecasted financial results. We also exclude other acquisition-related costs, which are directly related to an acquisition but do not meet the criteria to be recognized on the acquired entity’s initial balance sheet as part of the purchase price allocation. These costs are also significantly impacted by the timing, complexity, and size of acquisitions.

•Acquisition-related cash and share-based compensation costs are incurred in connection with contingent cash payments or the issuance of share-based payment awards, which include service requirements, as a part of certain physician practice acquisitions. These costs include fair value adjustments for liability-classified awards. These costs are excluded because they are unrelated to the underlying operating results of our business and to facilitate comparison of our current financial results to our historical financial results and to our peer group companies’ financial results. In addition, the magnitude of these expenses is significantly impacted by the timing and size of the acquisitions of physician practices.

13 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q 13


Explanation and Reconciliation of Non-GAAP Financial Measures

historical financial results and to our peer group companies’ financial results. In addition, the magnitude of these expenses is significantly impacted by the timing and size of the acquisitions of physician practices.

•Impairments and gain or loss on disposal of assets, net are excluded because they do not occur in or reflect the ordinary course of our ongoing business operations and are inherently unpredictable in timing and amount, and in the case of impairments, are non-cash amounts, so their exclusion facilitates comparison of historical, current, and forecasted financial results.

•Litigation recoveries or charges, net are excluded because they often relate to events that may have occurred in prior or multiple periods, do not occur in or reflect the ordinary course of our business and are inherently unpredictable in timing and amount.

The tax effect for each of the items listed above is determined using the tax rate and other tax attributes applicable to the item and the jurisdiction(s) in which the item is recorded. The gross, tax and net impact of each item are presented with our GAAP to non-GAAP reconciliations.

Definitions

Growth rate calculation: growth rates in this report are determined by dividing the difference between current-period results and prior-period results by prior-period results.

Non-GAAP operating earnings: operating earnings excluding (1) LIFO charges/(credits), (2) state opioid assessment related to prior fiscal years, (3) restructuring and employee severance, (4) amortization and other acquisition-related costs, (5) acquisition-related cash and share-based compensation costs, (6) impairments and (gain)/loss on disposal of assets, net, and (7) litigation (recoveries)/charges, net.

Non-GAAP earnings before income taxes: earnings before income taxes excluding (1) LIFO charges/(credits), (2) state opioid assessment related to prior fiscal years, (3) restructuring and employee severance, (4) amortization and other acquisition-related costs, (5) acquisition-related cash and share-based compensation costs, (6) impairments and (gain)/loss on disposal of assets, net, and (7) litigation (recoveries)/charges, net.

Non-GAAP net earnings attributable to non-controlling interests: net earnings attributable to non-controlling interests excluding (1) LIFO charges/(credits), (2) state opioid assessment related to prior fiscal years, (3) restructuring and employee severance, (4) amortization and other acquisition-related costs, (5) acquisition-related cash and share-based compensation costs, (6) impairments and (gain)/loss on disposal of assets, net, and (7) litigation (recoveries)/charges, net, each net of tax.

Non-GAAP net earnings attributable to Cardinal Health, Inc.: net earnings attributable to Cardinal Health, Inc. excluding (1) LIFO charges/(credits), (2) state opioid assessment related to prior fiscal years, (3) restructuring and employee severance, (4) amortization and other acquisition-related costs, (5) acquisition-related cash and share-based compensation costs, (6) impairments and (gain)/loss on disposal of assets, net, and (7) litigation (recoveries)/charges, net, each net of tax.

Non-GAAP effective tax rate: provision for income taxes adjusted for the tax impacts of (1) LIFO charges/(credits), (2) state opioid assessment related to prior fiscal years, (3) restructuring and employee severance, (4) amortization and other acquisition-related costs, (5) acquisition-related cash and share-based compensation costs, (6) impairments and (gain)/loss on disposal of assets, net, and (7) litigation (recoveries)/charges, net, divided by (earnings before income taxes adjusted for the items above).

Non-GAAP diluted earnings per share attributable to Cardinal Health, Inc.: non-GAAP net earnings attributable to Cardinal Health, Inc. divided by diluted weighted-average shares outstanding.

14 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q


Explanation and Reconciliation of Non-GAAP Financial Measures

GAAP to Non-GAAP ~~Reconciliations~~Reconciliation

	Operating Earnings		Operating Earnings Growth Rate		Earnings Before Income Taxes		Provision for Income Taxes		Net Earnings Attributable to Non-Controlling Interests		Net Earnings1		Net Earnings1 Growth Rate		Diluted EPS1		Diluted EPS1 Growth Rate
(in millions, except per common share amounts)	Operating Earnings		Operating Earnings Growth Rate		Earnings Before Income Taxes		Provision for Income Taxes		Net Earnings Attributable to Non-controlling Interests		Net Earnings1		Net Earnings1 Growth Rate		Diluted EPS1		Diluted EPS1 Growth Rate
(in millions, except per common share amounts)	Three Months Ended September 30, 2025
	Three Months Ended December 31, 2025
GAAP	$	~~668~~707	1829	%	$	~~598~~630	$	~~144~~159	$	(4)	$	~~450~~467	817	%	$	1.8897	1119	%
Restructuring and employee severance	20				20		5				15				0.06
State opioid assessments related to prior fiscal years	(17)				(17)		(4)				(13)				(0.05)
Amortization and other acquisition-related costs	104				104		30				74				0.31
Restructuring and employee severance	21				21		5				16				0.07
Acquisition-related cash and share-based compensation costs	64				64		1				63				0.26
Amortization and other acquisition-related costs	130				130		20				110				0.46
Impairments and (gain)/loss on disposal of assets, net	2				2		1				1				—
Acquisition-related cash and share-based compensation costs	67				67		4				63				0.27
Litigation (recoveries)/charges, net	—				—		(8)				8				0.03
Impairments and (gain)/loss on disposal of assets, net	(14)				(14)		(3)				(11)				(0.06)
Non-GAAP	$	857	37	%	$	788	$	173	$	(4)	$	611	33	%	$	2.55	36	%
Litigation (recoveries)/charges, net	(18)				(18)		(8)				(10)				(0.04)
	Three Months Ended September 30, 2024
Non-GAAP	$	877	38	%	$	799	$	171	$	(4)	$	624	33	%	$	2.63	36	%
GAAP	$	568	N.M.		$	541	$	124	$	(1)	$	416	N.M.		$	1.70	N.M.
	Three Months Ended December 31, 2024
Restructuring and employee severance	24				24		6				18				0.07
GAAP	$	549	9	%	$	511	$	110	$	(1)	$	400	9	%	$	1.65	10	%
Amortization and other acquisition-related costs	74				74		20				54				0.22
Restructuring and employee severance	9				9		2				7				0.03
Impairments and (gain)/loss on disposal of assets, net	(1)				(1)		—				(1)				—
Amortization and other acquisition-related costs	105				105		27				78				0.32
Litigation (recoveries)/charges, net	(40)				(40)		(12)				(28)				(0.11)
Impairments and (gain)/loss on disposal of assets, net	3				3		1				2				0.01
Non-GAAP	$	625	12	%	$	598	$	138	$	(1)	$	460	7	%	$	1.88	9	%
Litigation (recoveries)/charges, net	(31)				(31)		(12)				(19)				(0.08)
Non-GAAP	$	635	9	%	$	597	$	127	$	(1)	$	468	1	%	$	1.93	2	%
	Six Months Ended December 31, 2025
GAAP	$	1,375	23	%	$	1,228	$	303	$	(8)	$	917	12	%	$	3.85	15	%
State opioid assessments related to prior fiscal years	(17)				(17)		(4)				(13)				(0.05)
Restructuring and employee severance	41				41		9				32				0.13
Amortization and other acquisition-related costs	234				234		49				185				0.78
Acquisition-related cash and share-based compensation costs	131				131		5				126				0.53
Impairments and (gain)/loss on disposal of assets, net	(12)				(12)		(3)				(9)				(0.03)
Litigation (recoveries)/charges, net	(18)				(18)		(14)				(4)				(0.02)
Non-GAAP	$	1,734	38	%	$	1,587	$	344	$	(8)	$	1,235	33	%	$	5.18	36	%
	Six Months Ended December 31, 2024
GAAP	$	1,117	N.M.		$	1,052	$	234	$	(2)	$	816	N.M.		$	3.35	N.M.
Restructuring and employee severance	33				33		8				25				0.10
Amortization and other acquisition-related costs	179				179		47				132				0.54
Impairments and (gain)/loss on disposal of assets, net	2				2		—				2				0.01
Litigation (recoveries)/charges, net	(71)				(71)		(24)				(47)				(0.19)
Non-GAAP	$	1,260	10	%	$	1,195	$	266	$	(2)	$	927	4	%	$	3.81	6	%

1 Attributable to Cardinal Health, Inc.

The sum of the components and certain computations may reflect rounding adjustments.

We apply varying tax rates depending on the item's nature and tax jurisdiction where it is incurred.

15 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q 15


Other

Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in the quantitative and qualitative market risk disclosures included in the 2025 Form 10-K since the end of fiscal 2025 through ~~September~~December 3031, 2025.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We evaluated, with the participation of our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) as of ~~September~~December 3031, 2025. Based on this evaluation, our principal executive officer and principal financial officer have concluded that as of ~~September~~December 3031, 2025, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended December ~~September 30~~31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

16Modification ~~Cardinal~~of ~~Health~~Certain |Software ~~Q1 Fiscal 2026 Form 10-Q~~Systems

The Pharma segment is in the process of modifying certain finance and operating information systems related to ongoing supply chain optimization initiatives. If these systems and processes are not effectively implemented or fail to operate as intended, it could adversely affect our internal control over financial reporting.



16			Cardinal Health \| Q2 Fiscal 2026 Form 10-Q


Other

Legal Proceedings

The legal proceedings described in Note 6 of the "Notes to Condensed Consolidated Financial Statements" are incorporated in this "Legal Proceedings" section by reference.

Risk Factors

You should carefully consider the information in this Form 10-Q and the risk factors discussed in "Risk Factors" and other risks discussed in the 2025 Form 10-K, our Form 10-Q for the quarter ended September 30, 2025, and our other filings with the SEC since June 30, 2025. These risks could materially and adversely affect our results of operations, financial condition, liquidity, and cash flows. Our business also could be affected by risks that we are not presently aware of or that we currently consider immaterial to our operations.

Changes to the U.S. healthcare environment may not

be favorable to us.

Over a number of years, the U.S. healthcare industry has undergone significant changes designed to increase access to medical care, improve safety and patient outcomes, contain costs, and increase efficiencies. These changes include a general decline in Medicare and Medicaid reimbursement levels, efforts by healthcare insurance companies to limit or reduce payments to pharmacies and providers, the basis for payments beginning to transition from a fee-for-service model to value-based payments and risk-sharing models, and the industry shifting away from traditional healthcare venues like hospitals and into clinics, physician offices, and patients’ homes.

We expect the U.S. healthcare industry to continue to change significantly in the future. Possible changes include changes in legislation or regulations governing prescription pharmaceutical pricing (including recently proposed changes to the definition, implementation and documentation of the Bona Fide Services Fees excluded from the calculation of the Average Sales Price of Medicare Part B drugs), healthcare services, U.S.-based medical product manufacturing, mandated benefits, efforts to promote increased transparency in the pharmaceutical supply chain, drug shortages, further reduction of or limitations on governmental funding at the state or federal level, or efforts by healthcare insurance companies to further limit payments for products and services. Federal, state, and local governmental entities have also continued to increase their scrutiny of the U.S. healthcare market.

Uncertainty surrounding possible changes to the healthcare environment, including changes to regulatory enforcement

priorities, may directly or indirectly adversely affect us. The recently issued Executive Order titled "Delivering Most-Favored Nation Prescription Drug Pricing to American Patients" may impact the sales or profitability of branded pharmaceutical products; however, the extent of the impact may vary depending on the timeline for implementation and the number of pharmaceutical drugs that are impacted. Additionally, it is possible that the adoption of the One Big Beautiful Bill Act ("OBBBA") could reduce participation in Medicare and Medicaid programs, resulting in a change in utilization of the healthcare system. This may adversely affect demand for our products and services and could have an effect on our results of operations and financial condition.

Private challenges to government healthcare policy may also have an adverse impact on our business. For example, the federal 340B drug pricing program requires pharmaceutical manufacturers to offer discounts on certain drugs purchased by covered entities, and some of our Pharma segment customers are covered entities or contract pharmacies for covered entities. Over a dozen pharmaceutical manufacturers have restricted sales under the 340B drug pricing program to a limited number of contract pharmacies. These practices are the subject of ongoing litigation; however, if manufacturers continue this practice and if courts uphold this practice, our customers may be adversely impacted, which could adversely impact our business.

Cardinal Health | Q1 Fiscal 2026 Form 10-Q 17

Other

Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Period	Total Numberof SharesPurchased (1,2,3)	Average Price Paid per Share (2,3)		Total Number of SharesPurchasedas Part of Publicly Announced Programs (2,3,4)	ApproximateDollar Value ofShares That MayYet be PurchasedUnder the Program (34)(in millions)
July 2025	11	$	159.70	—	$	2,743
October 2025	443,682	$	151.88	443,675	$	2,368
Aug 2025	2,025,391	148.12		2,025,385	2,443
November 2025	1,577,127	190.22		1,577,121	2,068
Sept 2025	31	150.34		—	2,443
December 2025	297,898	200.00		297,892	1,993
Total	2,~~025~~318,~~433~~707	$	~~148~~184.1215	2,~~025~~318,~~385~~688	$	21,~~443~~993

(1)Reflects 117, 6, and 316 common shares purchased in ~~July~~October, ~~August~~November, and ~~September~~December 2025, respectively, through a rabbi trust as investments of participants in our Deferred Compensation Plan.

(2)On ~~August~~November 133, 2025, we entered into an ASR program to purchase common shares for an aggregate purchase price of $375 million and received an initial delivery of 21.06 million common shares using a reference price of $~~148~~190.1222. The ASR program ~~will~~concluded ~~conclude~~on byDecember ~~October 31~~15, 2025 at a volume weighted average price per common share of $200.00 resulting in a final delivery of 0.3 million common shares. See Note 10 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

(3)On ~~June~~August 713, ~~2023~~2025, ~~our~~we ~~Board~~entered ofinto ~~Directors~~an ~~approved~~ASR aprogram ~~new~~to ~~$3.5~~purchase ~~billion~~common ~~share~~shares ~~repurchase~~for ~~program,~~an ~~which~~aggregate ~~will~~purchase ~~expire~~price onof ~~December~~$375 ~~31,~~million ~~2027.~~and Asreceived ofan ~~September~~initial ~~30,~~delivery ~~2025,~~of ~~we had $~~2.~~4 billion~~0 ~~authorized~~million ~~for~~common ~~share~~shares ~~repurchases~~using ~~remaining~~a ~~under~~reference ~~this~~price ~~program~~of $148.12. The ASR program isconcluded ~~expected~~on toOctober ~~reduce~~31, ~~the~~2025 ~~amount~~at ~~remaining~~a ~~under~~volume ~~our~~weighted ~~existing~~average price per common share ~~repurchase~~of ~~authorization~~$151.88 toresulting ~~less~~in ~~than~~a $2final delivery of 0.4 ~~billion~~million ~~when~~common ~~concluded~~shares. See Note 10 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

(4)On June 7, 2023, our Board of Directors approved a $3.5 billion share repurchase program, which will expire on December 31, 2027. As of December 31, 2025, we had $2.0 billion authorized for share repurchases remaining under this program.

Other Information

Rule 10b5-1 Plan Adoptions and Modifications

During the three months ended ~~September 30~~December 31, 2025, no director or officer adopted, modified or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule10b5-1 trading arrangement" as each term is defined in Item 408 of Regulation S-K under the Exchange Act.

1817 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q


Financial Statements

Condensed Consolidated Statements of Earnings

(Unaudited)

	Three Months Ended September 30,
	Three Months Ended December 31,				Six Months Ended December 31,
(in millions, except per common share amounts)	2025		2024		2025		2024
Revenue	$	6465,~~009~~627	$	5255,~~277~~264	$	129,636	$	107,541
Cost of products sold	6163,~~690~~230		5053,~~375~~323		124,920		103,698
Gross margin	2,~~319~~397		1,~~902~~941		4,716		3,843
Operating expenses:
Distribution, selling, general and administrative expenses	1,~~461~~504		1,~~277~~306		2,965		2,583
Restructuring and employee severance	2021		249		41		33
Amortization and other acquisition-related costs	~~104~~130		74105		234		179
Acquisition-related cash and share-based compensation costs	6467		—		131		—
Impairments and (gain)/loss on disposal of assets, net	2(14)		~~(1)~~3		(12)		2
Litigation (recoveries)/charges, net	—(18)		(4031)		(18)		(71)
Operating earnings	~~668~~707		~~568~~549		1,375		1,117
Other (income)/expense, net	(1011)		~~(5)~~3		(21)		(2)
Interest expense, net	8088		3235		168		67
Earnings before income taxes	~~598~~630		~~541~~511		1,228		1,052
Provision for income taxes	~~144~~159		~~124~~110		303		234
Net earnings	~~454~~471		~~417~~401		925		818
Less: Net earnings attributable to noncontrolling interests	(4)		(1)		(8)		(2)
Net earnings attributable to Cardinal Health, Inc.	$	~~450~~467	$	~~416~~400	$	917	$	816
Earnings per common share attributable to Cardinal Health, Inc.:
Basic	$	1.8998	$	1.7165	$	3.87	$	3.37
Diluted	1.8897		1.7065		3.85		3.35
Weighted-average number of common shares outstanding:
Basic	~~238~~236		~~243~~242		237		242
Diluted	~~239~~237		~~245~~243		238		243
Cash dividends declared per common share	$	0.5107	$	0.5056	$	1.0214	$	1.0112

See notes to condensed consolidated financial statements.

18 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q 19


Financial Statements

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended September 30,
	Three Months Ended December 31,				Six Months Ended December 31,
(in millions)	2025		2024		2025		2024
Net earnings	$	~~454~~471	$	~~417~~401	$	925	$	818
Other comprehensive income/(loss):
Foreign currency translation adjustments and other	~~(4)~~9		5(16)		5		(11)
Net unrealized gain/(loss) on derivative instruments, net of tax	—		7
Net unrealized loss on derivative instruments, net of tax	(3)		(9)		(3)		(2)
Total other comprehensive income/(loss), net of tax	~~(4)~~6		12(25)		2		(13)
Total comprehensive income	~~450~~477		~~429~~376		927		805
Less: comprehensive income attributable to noncontrolling interests	(4)		(1)		(8)		(2)
Total comprehensive income attributable to Cardinal Health, Inc.	$	~~446~~473	$	~~428~~375	$	919	$	803

See notes to condensed consolidated financial statements.

2019 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q


Financial Statements

Condensed Consolidated Balance Sheets


(in millions)	December 31, 2025		June 30, 2025
	(Unaudited)
Assets
Current assets:
Cash and equivalents	$	2,777	$	3,874
Trade receivables, net	13,662		13,242
Inventories, net	20,116		16,831
Prepaid expenses and other	2,675		2,414
Assets held for sale	—		12
Total current assets	39,230		36,373

Property and equipment, net	2,877		2,858
Goodwill and other intangibles, net	13,978		12,177

Other assets	1,998		1,714
Total assets	$	58,083	$	53,122

Liabilities and Shareholders’ Deficit
Current liabilities:
Accounts payable	$	38,996	$	34,713
Current portion of long-term obligations and other short-term borrowings	680		550
Other accrued liabilities	3,638		3,634

Total current liabilities	43,314		38,897

Long-term obligations, less current portion	8,347		7,977
Deferred income taxes and other liabilities	9,122		8,882

Shareholders’ deficit:
Preferred shares, without par value:
Authorized—500 thousand shares, Issued—none	—		—
Common shares, without par value:
Authorized—755 million shares, Issued—271 million shares at December 31, 2025 and June 30, 2025	2,847		2,956
Retained earnings	1,455		783
Common shares in treasury, at cost: 35 million shares and 32 million shares at December 31, 2025 and June 30, 2025, respectively	(7,033)		(6,365)
Accumulated other comprehensive loss	(153)		(155)
Total Cardinal Health, Inc. shareholders' deficit	(2,884)		(2,781)
Noncontrolling interests	184		147
Total shareholders’ deficit	(2,700)		(2,634)
Total liabilities and shareholders’ deficit	$	58,083	$	53,122

(in millions)	September 30, 2025		June 30, 2025
Assets	(Unaudited)
Current assets:
Cash and equivalents	$	4,593	$	3,874
Trade receivables, net	13,770		13,242
Inventories, net	17,559		16,831
Prepaid expenses and other	2,602		2,414
Assets held for sale	13		12
Total current assets	38,537		36,373
Property and equipment, net	2,831		2,858
Goodwill and other intangibles, net	12,110		12,177
Other assets	1,750		1,714
Total assets	$	55,228	$	53,122
Liabilities and Shareholders’ Deficit
Current liabilities:
Accounts payable	$	36,860	$	34,713
Current portion of long-term obligations and other short-term borrowings	52		550
Other accrued liabilities	3,356		3,634
Total current liabilities	40,268		38,897
Long-term obligations, less current portion	8,980		7,977
Deferred income taxes and other liabilities	8,711		8,882
Shareholders’ deficit:
Preferred shares, without par value:
Authorized—500 thousand shares, Issued—none	—		—
Common shares, without par value:
Authorized—755 million shares, Issued—271 million shares at September 30, 2025 and June 30,2025	2,746		2,956
Retained earnings	1,116		783
Common shares in treasury, at cost: 33 million shares and 32 million shares at September 30, 2025 and June 30, 2025, respectively	(6,582)		(6,365)
Accumulated other comprehensive loss	(159)		(155)
Total Cardinal Health, Inc. shareholders' deficit	(2,879)		(2,781)
Noncontrolling interests	148		147
Total shareholders’ deficit	(2,731)		(2,634)
Total liabilities and shareholders’ deficit	$	55,228	$	53,122

See notes to condensed consolidated financial statements.

20 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q 21


Financial Statements

Condensed Consolidated Statements of Shareholders' Deficit

(Unaudited)

	Common Shares			Retained Earnings/(Accumulated Deficit)		Treasury Shares			Accumulated OtherComprehensiveLoss		Noncontrolling Interests		TotalShareholders’ Deficit
(in millions)	Shares Issued	Amount		~~Retained Earnings/(Accumulated Deficit)~~		Shares	Amount
	Three Months Ended September 30, 2025
	Three Months Ended December 31, 2025
Balance at June 30, 2025	271	$	2,956	$	783	(32)	$	(6,365)	$	(155)	$	147	$	(2,634)
Balance at September 30, 2025	271	$	2,746	$	1,116	(33)	$	(6,582)	$	(159)	$	148	$	(2,731)
Net earnings				~~450~~467							4		~~454~~471
Other comprehensive loss, net of tax									(4)				(4)
Other comprehensive income, net of tax									6				6
Acquisitions											~~(1)~~33		~~(1)~~33
Employee stock plans activity, net of shares withheld for employee taxes	—	~~(135)~~26				1—	863						~~(49)~~29
Share repurchase program activity	—	(75)				(2)	(~~303~~454)						(~~378~~379)
Dividends declared				(~~117~~128)									(~~117~~128)
Payments to noncontrolling interests											(31)		(31)
Other											1		1
Balance at December 31, 2025	271	$	2,847	$	1,455	(35)	$	(7,033)	$	(153)	$	184	$	(2,700)
Balance at September 30, 2025	271	$	2,746	$	1,116	(33)	$	(6,582)	$	(159)	$	148	$	(2,731)

	Three Months Ended September 30, 2024
	Three Months Ended December 31, 2024
Balance at June 30, 2024	327	$	2,917	$	(286)	(83)	$	(5,677)	$	(167)	$	1	$	(3,212)
Net earnings				416							1		417
Other comprehensive income, net of tax									12				12
Employee stock plans activity, net of shares withheld for employee taxes	—	(15)				1	17						2
Share repurchase program activity		(75)				(3)	(303)						(378)
Dividends declared				(119)									(119)
Other				3							(1)		2
Balance at September 30, 2024	327	$	2,827	$	14	(85)	$	(5,963)	$	(155)	$	1	$	(3,276)
Net earnings				400							1		401
Other comprehensive loss, net of tax									(25)				(25)
Acquisitions											72		72
Employee stock plans activity, net of shares withheld for employee taxes	—	30				—	13						43
Share repurchase program activity	—	75				—	(76)						(1)
Retirement of treasury stock	(56)	—				56	—						—
Dividends declared				(128)									(128)
Payments to noncontrolling interests											(4)		(4)
Other				(3)									(3)
Balance at December 31, 2024	271	$	2,932	$	283	(29)	$	(6,026)	$	(180)	$	70	$	(2,921)




	Six Months Ended December 31, 2025
Balance at June 30, 2025	271	$	2,956	$	783	(32)	$	(6,365)	$	(155)	$	147	$	(2,634)
Net earnings				917							8		925
Other comprehensive income, net of tax									2				2
Acquisitions											32		32

Employee stock plans activity, net of shares withheld for employee taxes	—	(109)				1	89						(20)
Share repurchase program activity						(4)	(757)						(757)

Dividends declared				(245)									(245)
Payments to noncontrolling interests											(4)		(4)
Other	—	—									1		1
Balance at December 31, 2025	271	$	2,847	$	1,455	(35)	$	(7,033)	$	(153)	$	184	$	(2,700)


	Six Months Ended December 31, 2024
Balance at June 30, 2024	327	$	2,917	$	(286)	(83)	$	(5,677)	$	(167)	$	1	$	(3,212)
Net earnings				816							2		818
Other comprehensive loss, net of tax									(13)				(13)
Acquisitions											72		72
Employee stock plans activity, net of shares withheld for employee taxes	—	15				1	30						45
Share repurchase program activity						(3)	(379)						(379)
Retirement of treasury stock	(56)	—				56	—						—
Dividends declared				(247)									(247)
Purchase of noncontrolling interests											(4)		(4)
Other											(1)		(1)
Balance at December 31, 2024	271	$	2,932	$	283	(29)	$	(6,026)	$	(180)	$	70	$	(2,921)

See notes to condensed consolidated financial statements.

2221 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q


Financial Statements

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended September 30,
	Six Months Ended December 31,
(in millions)	2025		2024
Cash flows from operating activities:
Net earnings	$	~~454~~925	$	~~417~~818
Adjustments to reconcile net earnings to net cash provided by/(used in) operating activities:
Depreciation and amortization	~~233~~467		~~182~~374
Impairments and loss on sale of other investments	5		12
Impairments and (gain)/loss on disposal of assets, net	2(12)		~~(1)~~2
Share-based compensation	93180		3060
Provision for bad debts	1327		1628
Change in operating assets and liabilities, net of effects from acquisitions and divestitures:
(Increase)/decrease in trade receivables	(539)		288
Increase in trade receivables	(198)		(253)
Increase in inventories	(~~736~~3,279)		(~~678~~1,967)
Increase/(decrease) in accounts payable	24,~~147~~176		(~~1,394~~470)
Other accrued liabilities and operating items, net	(699)		(508)
Repurchases of liability-classified Specialty Alliance Units	(22)		—
Net cash provided by/(used in) operating activities	973		(1,647)
Other accrued liabilities and operating items, net	(610)		(637)
Net cash provided by/(used in) operating activities	1,659		(2,043)
Cash flows from investing activities:
Acquisition of subsidiaries, net of cash acquired	(411,925)		—(1,076)
Additions to property and equipment	(~~108~~239)		(90189)
Other investing items, net	7		2
Proceeds from disposal of property and equipment	31		—
Net cash used in investing activities	(142)		(88)
Proceeds from short-term investment in time deposit	—		200
Other investing items, net	11		1
Net cash used in investing activities	(2,122)		(1,064)
Cash flows from financing activities:
Proceeds from long-term obligations, net of issuance costs	989		—2,869
Reduction of long-term obligations	(~~512~~524)		(9423)
Purchases/(payments) of noncontrolling interests, net	(3)		—
Payments of noncontrolling interests, net	(4)		(4)
Net tax withholding from share-based compensation	(8081)		(2815)
Dividends on common shares	(~~129~~251)		(~~128~~250)
Purchase of treasury shares	(375)		(375)
Purchase of treasury shares, net	(758)		(390)
Net cash used in financing activities	(110)		(540)
Net cash provided by/(used in) financing activities	(629)		1,787
Effect of exchange rates changes on cash and equivalents	(2)		9
Effect of exchange rate changes on cash and equivalents	(5)		(3)
Net increase/(decrease) in cash and equivalents	719		(2,266)
Net decrease in cash and equivalents	(1,097)		(1,323)
Cash and equivalents at beginning of period	3,874		5,133
Cash and equivalents at end of period	$	42,~~593~~777	$	23,~~867~~810

See notes to condensed consolidated financial statements.

22 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q 23


Notes to Financial Statements

Notes to Condensed Consolidated Financial Statements

1. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

Our condensed consolidated financial statements include the accounts of all majority-owned or consolidated subsidiaries, and all significant intercompany transactions and amounts have been eliminated. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the date of the acquisition or up to the date of disposal, respectively.

~~References~~We toreport ~~"we," "~~our," ~~and~~financial ~~similar~~results ~~pronouns~~ in ~~this~~two ~~Quarterly~~reportable ~~Report~~segments: onPharmaceutical ~~Form~~and ~~10-Q~~Specialty ~~for~~Solutions ~~the~~("Pharma") ~~quarter~~segment ~~ended~~and ~~September~~Global ~~30,~~Medical ~~2025~~Products ~~(this~~and ~~"Form~~Distribution ~~10-Q~~("GMPD") segment. All remaining operating segments that are not significant enough to ~~Cardinal~~require ~~Health~~separate reportable segment disclosures are included in Other, ~~Inc.~~which ~~and~~is ~~its~~comprised ~~majority-owned~~of orNuclear ~~consolidated~~and ~~subsidiaries~~Precision ~~unless~~Health ~~the~~Solutions, ~~context~~at-Home ~~requires~~Solutions, ~~otherwise~~and OptiFreight® Logistics.

References to "we," "our," and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended December 31, 2025 (this "Form 10-Q") are to Cardinal Health, Inc. and its majority-owned or consolidated subsidiaries unless the context requires otherwise.

Our fiscal year ends on June 30. References to fiscal 2026 and 2025 in these condensed consolidated financial statements are to the fiscal years ending or ended June 30, 2026 and June 30, 2025, respectively.

Our condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Quarterly Reports on Form 10-Q and include the information and disclosures required by accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. The preparation of financial statements in conformity with GAAP requires us to make estimates, judgments, and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts.

In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included, all such adjustments are of a normal and recurring nature. In addition, financial results presented for this fiscal 2026 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2026. These condensed consolidated financial statements are unaudited and, accordingly, should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (the "2025 Form 10-K").

Variable Interest Entities

We evaluate our ownership, contractual, and other interests in entities to determine if they are a variable interest entity (“VIE”), if we have a variable interest in those entities, and the nature and extent of those interests. These evaluations may involve management judgment and the use of estimates and assumptions based on available historical information, among other factors. Based on our evaluations, if we determine we are the primary beneficiary of such VIEs, we consolidate such entities into our financial statements.

based on available historical information, among other factors. Based on our evaluations, if we determine we are the primary beneficiary of such VIEs, we consolidate such entities into our financial statements.

Consolidated Variable Interest Entities

We consolidate a VIE when we have the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could be significant to the VIE and, as a result, are considered the primary beneficiary of the VIE.

In relation to the acquisition of GIThe ~~Alliance~~Specialty ~~("GIA")~~Alliance, we concluded that the ~~GIA~~The Specialty Alliance management services organization ("MSO") is the primary beneficiary of certain physician practices and therefore the practices are consolidated as VIEs. Additionally, in relation to the acquisition of Integrated Oncology Network ("ION"), we concluded that ION is the primary beneficiary of certain physician practices and therefore the practices are consolidated as VIEs. The ~~GIA~~Specialty Alliance and ION VIEs do not have a material impact on our condensed consolidated statements of earnings or condensed consolidated statements of cash flows. Total assets and liabilities included in the consolidated balance sheets for ~~the~~The ~~GIA~~Specialty Alliance and ION VIEs were $~~760 million~~ 1.2 billion and $~~620~~ 960 million, respectively, as of ~~September 30~~December 31, 2025.

Noncontrolling Interests

Noncontrolling interests represent the portion of net earnings, comprehensive income, and net assets that is not attributable to Cardinal Health, Inc. Noncontrolling interests as of ~~September 30~~December 31, 2025 primarily represents third-party equity interests in ~~Integrated Oncology Network ("~~ION"). See Note 2, for additional information on the acquisition of ION.

Recently Issued Financial Accounting Standards ~~And Disclosure Rules Not Yet Adopted~~

Weand ~~assess~~Disclosure ~~the~~Rules ~~adoption~~Not ~~impacts~~Yet ~~of recently issued accounting standards by the FASB on our consolidated financial statements as well as material updates to previous assessments, if any, from the 2025 Form 10-K.~~Adopted

We assess the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board ("FASB") on our consolidated financial statements as well as material updates to previous assessments, if any, from the 2025 Form 10-K.

Income Tax Disclosure

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This guidance also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for us in the 2026 Form 10-K and should be applied on a prospective basis, with retrospective application permitted. We are currently evaluating the impact of adoption of this guidance on our disclosures.

~~Disaggregation~~23 ofCardinal ~~Income~~Health ~~Statement~~| ~~Expenses~~Q2 Fiscal 2026 Form 10-Q

24 Cardinal Health | Q1 Fiscal 2026 Form 10-Q


Notes to Financial Statements

~~are~~effective ~~included~~for us in ~~any~~fiscal ~~relevant~~2026 ~~income~~Form ~~statement~~10-K ~~expense~~and ~~caption~~will onbe anapplied ~~annual~~on ~~and~~a ~~interim~~prospective basis. ~~Additionally,~~Adoption ~~the~~will ~~guidance~~require ~~requires~~enhancements ~~the~~to ~~disclosure~~our ofincome ~~total~~tax ~~selling~~disclosures ~~expenses~~but ~~and,~~is innot ~~annual~~expected ~~reporting~~to ~~periods,~~have ana ~~entity's~~significant ~~definition~~impact ofon ~~selling expenses. This guidance will be effective for us in~~ our ~~fiscal~~financial ~~2028~~reporting, ~~Form~~or ~~10-K and should be applied~~ on aour ~~prospective~~operational ~~basis~~processes, ~~with~~controls ~~retrospective~~and ~~application~~governance ~~permitted.~~in Wesupport ~~are~~of ~~currently evaluating~~ the ~~impact~~new ~~of adoption of this~~ guidance ~~on our disclosures~~.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), which requires disaggregated disclosures of certain categories of expenses which are included in any relevant income statement expense caption on an annual and interim basis. Additionally, the guidance requires the disclosure of total selling expenses and, in annual reporting periods, an entity's definition of selling expenses. This guidance will be effective for us in fiscal 2028 Form 10-K and should be applied on a prospective basis, with retrospective application permitted. We are currently evaluating the impact of adoption of this guidance on our disclosures.

Recently Adopted Financial Accounting Standards

There were no new material accounting standards adopted induring the ~~three~~six months ended ~~September~~December 3031, 2025.

2. Acquisitions

Solaris Health

On ~~August~~November 123, 2025, we ~~announced that we~~, through ~~the~~The Specialty Alliance, ~~have~~completed ~~entered~~the ~~into~~acquisition aof ~~definitive agreement to acquire~~ Solaris Health, a urology MSO, for a purchase price of approximately $1.9 billion in cash, subject to certain adjustments. In connection with the closing of this transaction, we ~~will~~issued ~~issue~~ common units in ~~the~~The Specialty Alliance to certain physicians and members of management which are estimated to have a grant date fair value of approximately $500 million, a portion of which will be recognized as post-combination expense within acquisition-related cash and share-based compensation costs. We have accounted for the acquisition of the ownership interest in Solaris as a business combination in accordance with ASC 805.

Solaris Health includes more than 750 providers across more than 250 practice locations in 14 states. Solaris Health ~~will~~is ~~become~~ part of The Specialty Alliance, our multi-specialty MSO platform, and their results ~~will~~are be reported within our Pharma segment. ~~Following~~With the closing of this transaction, we ~~will~~ own approximately 7576% of The Specialty Alliance. ~~This transaction is subject to the satisfaction of customary closing conditions, including receipt of required physician and regulatory approvals.~~

WeTransaction ~~intend~~and tointegration ~~finance~~costs ~~the~~associated ~~transaction~~ with athe ~~combination~~Solaris ofacquisition ~~cash~~were ~~proceeds~~$37 ~~from~~million ~~the recent debt financing~~ and ~~cash~~$40 onmillion ~~hand.~~during ~~See~~the ~~Note~~three 5and ~~for~~six ~~additional~~months ~~information~~ended onDecember ~~the~~31, ~~debt~~2025, ~~financing~~respectively.

Advanced Diabetes Supply Group ("ADS")

On April 1, 2025, we completed the acquisition of ADS for a purchase price of approximately $1.0 billion in cash, subject to certain adjustments.

Transaction and integration costs associated with the ADS acquisition were $3 million ~~for~~and $7 million during the three and six months ended ~~September~~December 3031, 2025, respectively.

GI Alliance ("GIA")

On January 30, 2025, we completed the acquisition of a 73% ~~percent~~ ownership interest in GIA for a purchase price of approximately $2.8 billion in cash~~, subject to certain adjustments~~. Beginning on the third anniversary of the closing, we have the ability to exercise a call right to purchase up to 100 percent of the remaining outstanding interests.

Additionally, on May 30, 2025, we, through ~~the~~The Specialty Alliance, completed the acquisition of Urology America for a purchase price of $381 million in cash and equity in ~~the~~The Specialty Alliance~~, subject to certain adjustments~~.

Transaction and integration costs associated with the GIA and Urology America acquisitions were $112 million ~~for~~and $7 million during the three and six months ended ~~September~~December 3031, 2025, respectively.

Integrated Oncology Network ("ION")

On December 2, 2024, we completed the acquisition of ION for a purchase price of $1.1 billion in cash~~, subject to certain adjustments~~.

Transaction and integration costs associated with the ION acquisition were $1 million and $18 million for the three months ended ~~September~~December 31, 302025 and 2024, respectively, and $2 million and $20 million during the six months ended December 31, 2025 and 2024, respectively.

Fair Value of Assets Acquired and Liabilities Assumed

The allocation of the purchase price for the ~~acquisition~~acquisitions of Solaris Health, Urology America, ADS, ~~GIA,~~ and ~~ION~~GIA are not yet finalized and are subject to adjustment as we complete the valuation analysis of these acquisitions. The purchase prices are also subject to adjustment based on working capital requirements as set forth in the acquisition agreements.

~~Cardinal~~The ~~Health~~allocation |of Q1the ~~Fiscal~~fair ~~2026~~value ~~Form~~of 10assets acquired and liabilities assumed for the ION acquisition was finalized during the six months ended December 31, 2025, resulting in goodwill of $1.1 billion and the noncontrolling interest for ION was recognized at the acquisition-Qdate 25fair value of $157 million.



24			Cardinal Health \| Q2 Fiscal 2026 Form 10-Q


Notes to Financial Statements

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date for Solaris Health, Urology America, ADS, GIA, and ION:

(in millions)	~~Urology~~Solaris ~~America~~Health		UrologyAmerica		ADS		GIA		~~GIA~~ION		~~ION~~
Identifiable intangible assets:
Customer intangibles (1)	$	—	$	—	$	472	$	—	$	—	$	~~226~~
Trade names (2)	33239		33		28		200		~~200~~73		73
Non-competition agreements (3)	—39		—		—		23		23—		—
Total identifiable intangible assets acquired	33278		33		500		223		~~223~~73		~~299~~
Identifiable net assets/(liabilities):
Cash and equivalents	455		4		14		53		5310		8
Trade receivables, net	23249		23		~~101~~100		175		~~191~~58		59
Inventories	323		3		78		21		2120		4
Prepaid expenses and other	373		3		87		13		137		5
Property and equipment, net	2854		28		1		67		7539		39
Other assets	41191		41		377		319		~~312~~45		52
Accounts payable	(20105)		(20)		(104)		(89)		(8910)		~~(10)~~
Current portion of long-term obligations and other short-term borrowings	—		—		—		(1)		(13)		~~(3)~~
Other accrued liabilities	(11195)		(12)		(~~488~~397)		(176)		(~~173~~41)		~~(40)~~
Long-term obligations, less current portion	~~(6)~~—		(6)		—		(15)		(1514)		~~(14)~~
Deferred income taxes and other liabilities	(46164)		(45)		(13105)		(889)		(~~915~~50)		~~(90)~~
Total identifiable net assets/(liabilities) acquired	52459		52		~~474~~471		(299)		~~(305)~~134		~~309~~
Noncontrolling interest	~~(9)~~—		(9)		—		—		—(157)		~~(121)~~
Goodwill	~~338~~1,681		338		~~575~~578		3,084		31,~~090~~092		~~881~~
Total net assets acquired	$	~~381~~2,140	$	381	$	1,049	$	2,785	$	21,~~785~~069	$	~~1,069~~

(1) The weighted-average useful life of customer intangibles ~~ranges~~is ~~from~~ 10 years ~~to 20 years~~.

(2) The weighted-average useful life of trade names ranges from 2 years to 10 years.

(3) The weighted-average useful life of non-competition agreements is 45 years.

The valuation of identifiable intangible assets utilizes significant unobservable inputs and thus represents a Level 3 nonrecurring fair value measurement. The discount rates used to arrive at the present values of the identifiable intangible assets for Solaris Health, Urology America, ADS, GIA, and ION ranged from 7 to 20 percent, and reflect their internal rates of return and uncertainty in the cash flow projections, which is reflective of market participant assumptions.

The estimated fair value of ION customer intangibles (customer contracts) were determined using an income-based approach, which includes market participant expectations of the cash flows that an asset could generate over its remaining useful life, discounted back to present value using an appropriate rate of return.

The estimated fair value of ADS customer intangibles (payor contracts) were determined using a multi-period excess earnings method, which estimates an intangible asset's value based on the present value of the incremental after-tax cash flows (or “excess earnings”) attributable only to the intangible asset.

The fair value of the Solaris Health, Urology America, ADS, GIA, and ION trademark intangible assets were determined utilizing the relief from royalty method, an income-based approach. Under this method, a royalty rate based on observed market royalties is applied to projected revenue supporting the trademarks and discounted to present value using an appropriate discount rate.

The fair value of the non-compete intangibles acquired from Solaris Health and GIA were determined by applying the differential cash flow method which compares the present value of cash flows with and without the non-compete agreements in place.

The vested Specialty Alliance Units, formerly referred to as GIA Units, issued in relation to the GIA acquisition were recognized at their acquisition date fair value of $739 million and are included in deferred income taxes and other liabilities in the consolidated balance sheet. The ~~valuation~~Specialty Alliance Units issued and included in the purchase price of the Solaris acquisition were recognized at their acquisition date fair value of $210 million and are included in deferred income taxes and other liabilities in the consolidated balance sheet. The valuation of The Specialty Alliance Units utilizes significant unobservable inputs and thus represents a recurring Level 3 fair value measurement. The fair value of ~~the~~The Specialty Alliance Units in relation to the GIA acquisition was determined using a discount rate of 9.5% and an estimated weighted average service period two years. The fair value of ~~two~~The Specialty Alliance Units in relation to the Solaris acquisition was determined using a discount rate of 7.5% and an estimated service period of five years.

~~The~~25 ~~noncontrolling~~Cardinal ~~interest~~Health ~~for~~| ~~ION~~Q2 ~~was~~Fiscal ~~recognized~~2026 atForm ~~the acquisition~~10-~~date fair value of $121 million.~~ Q


Notes to Financial Statements

3. Restructuring and Employee Severance

The following ~~table~~tables ~~summarizes~~summarize restructuring and employee severance costs:

	Three Months Ended September 30,
	Three Months Ended December 31,
(in millions)	2025		2024
Employee-related costs	$	15	$	16
Employee-related	$	15	$	3
Facility exit and other costs	5		8
Facility exit and other	6		6
Total restructuring and employee severance	$	2021	$	249


	Six Months Ended December 31,
(in millions)	2025		2024
Employee-related	$	30	$	19
Facility exit and other	11		14
Total restructuring and employee severance	$	41	$	33

Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated, duplicate payroll costs, and retention bonuses incurred during transition periods. Facility exit and other costs primarily consist of project consulting fees, accelerated depreciation, professional project management, and costs associated with vacant facilities.

During the three and six months ended ~~September~~December 3031, 2025 and 2024, restructuring and employee severance costs were primarily related to the implementation of certain enterprise-wide cost-savings measures and certain initiatives to rationalize our manufacturing operations.

26 Cardinal Health | Q1 Fiscal 2026 Form 10-Q

Notes to Financial Statements

The following table summarizes activity related to liabilities associated with restructuring and employee severance:

(in millions)	Employee-Related Costs		Facility Exitand Other Costs		Total
Balance at June 30, 2025	$	79	$	—	$	79
Additions	1419		—		1419
Payments and other adjustments	(22)		—		(22)
Balance at September 30, 2025	$	71	$	—	$	71
Balance at December 31, 2025	$	76	$	—	$	76

4. Goodwill and Other Intangible Assets

Goodwill

The following table summarizes the changes in the carrying amount of goodwill by segment and in total:

(in millions)	Pharmaceutical and Specialty Solutions		Global Medical Products and Distribution		Other (1)		Total
Balance at June 30, 2025	$	7,943	$	—	$	1,748	$	9,691
Goodwill acquired, net of purchase price adjustments	211,918		—		~~(3)~~—		181,918
Foreign currency translation adjustments and other	2		—		—		2
Balance at December 31, 2025	$	9,861	$	—	$	1,748	$	11,609
Balance at September 30, 2025	$	7,966	$	—	$	1,745	$	9,711

(1) Comprised of the remaining operating segments, Nuclear and Precision Health Solutions, at-Home Solutions and OptiFreight® Logistics.

~~During~~Goodwill increased in the ~~three~~six months ended ~~September 30~~December 31, 2025 primarily due to the Solaris acquisition in the Pharma segment. Goodwill recognized in connection with the acquisition primarily represent the expected benefits from the expected growth from new customers, wethe ~~did~~assembled ~~not~~workforce ~~identify~~of ~~any~~the ~~indicators~~acquired entities and synergies of ~~impairment~~integrating ~~within~~these ~~our~~businesses. ~~reporting~~Substantially ~~units~~all of the goodwill recorded is expected to be non-deductible for income tax purposes.

~~Goodwill~~Purchased ~~increased~~goodwill inis ~~the~~tested ~~three~~for ~~months~~impairment ~~ended~~annually ~~September 30,~~or ~~2025~~when ~~due~~indicators toof ~~purchase~~impairment ~~accounting~~exist. ~~adjustments~~Goodwill ~~related~~impairment totesting ~~acquisitions~~involves ina comparison of the ~~Pharma~~estimated ~~segment~~fair ~~and~~value ~~Other.~~of reporting units to the respective carrying amount.

As described in Note 2, the purchase price and assumed fair value of acquisitions is allocated to specific assets, resulting in the carrying amount approximating the fair value as of the acquisition date. Accordingly, we expect minimal excess of estimated fair value over carrying value for recent acquisitions. We will continue to evaluate acquisitions and the related reporting units for indicators of impairment.



26			Cardinal Health \| Q2 Fiscal 2026 Form 10-Q


Notes to Financial Statements

Other Intangible Assets

The following tables summarize other intangible assets by class at:

September 30, 2025

December 31, 2025

(in millions)

GrossIntangible

AccumulatedAmortization

NetIntangible

Weighted- Average Remaining Amortization Period (Years)

Indefinite-life intangibles:

Trademarks and patents

—

N/A

Total indefinite-life intangibles

—

N/A

Definite-life intangibles:

Customer intangibles

3,~~868~~632

2,~~687~~720

~~1,181~~912

1110

Trademarks, trade names and patents

1,~~341~~583

~~478~~503

~~863~~1,080

Developed technology and other

1,030

~~739~~752

~~292~~278

Non-Competition Agreements

72111

2326

4985

Total definite-life intangibles

6,~~311~~356

34,~~927~~001

2,~~385~~355

Total other intangible assets

6,~~325~~370

34,~~927~~001

2,~~399~~369

N/A


	June 30, 2025
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and patents	$	13	$	—	$	13
Total indefinite-life intangibles	13		—		13

Definite-life intangibles:
Customer intangibles	3,876		2,639		1,237
Trademarks, trade names and patents	1,340		459		881
Developed technology and other	1,030		726		304
Non-Competition Agreements	72		21		51
Total definite-life intangibles	6,318		3,845		2,473
Total other intangible assets	$	6,331	$	3,845	$	2,486

Total amortization of intangible assets was $8784 million and $6869 million for the three months ended ~~September 30~~December 31, 2025 and 2024, respectively., ~~Estimated~~and ~~annual~~$171 ~~amortization~~million ofand ~~intangible~~$137 million ~~assets~~ for the ~~remainder~~six ofmonths ~~fiscal~~ended ~~2026 through 2030 is as follows: $269~~December ~~million~~31, ~~$366~~2025 ~~million,~~and ~~$330 million~~2024, ~~$307 million, and $284 million~~respectively.

~~Cardinal~~The ~~Health~~following |table Q1summarizes ~~Fiscal~~the estimated amortization expense for the remainder of fiscal 2026 ~~Form~~through ~~10-Q~~fiscal 272030:

Notes to Financial Statements


(in millions)	Estimated Amortization Expense

2026	$	193
2027	382
2028	349
2029	327
2030	306

5. Long-Term Obligations and Other Short-Term Borrowings

The following table summarizes long-term obligations and other short-term borrowings at:

(in millions) (1)	~~September~~December 3031, 2025		June 30, 2025
3.75% Notes due 2025	$	—	$	501
4.7% Notes due 2026	~~498~~499		498
3.41% Notes due 2027	1,210		1,206
5.125% Notes due 2029	646		645
5.0% Notes due 2029	745		745
4.5% Notes due 2030	594		—
5.45% Notes due 2034	~~502~~501		501
5.35% Notes due 2034	990		989
5.15% Notes due 2035	~~395~~393		—
4.6% Notes due 2043	326		323
4.5% Notes due 2044	~~338~~339		338
4.9% Notes due 2045	~~440~~439		438
4.368% Notes due 2047	566		566
5.75% Notes due 2054	641		641
7.0% Debentures due 2026	124		124
Floating Rate Term Loan due 2028	799		799
Other Obligations	~~218~~215		213
Total	9,~~032~~027		8,527
Less: current portion of long-term obligations and other short-term borrowings	52680		550
Long-term obligations, less current portion	$	8,~~980~~347	$	7,977

(1) Maturities are presented on a calendar year basis.

Maturities of existing long-term obligations and other short-term borrowings for the remainder of fiscal 2026 through fiscal 2030 and thereafter are as follows: ~~$42 million, $1.9 billion, $837 million, $674 million, $766 million, and $4.9 billion.~~



27			Cardinal Health \| Q2 Fiscal 2026 Form 10-Q


Notes to Financial Statements


(in millions)	Debt maturities

2026	$	27
2027	1,882
2028	839
2029	674
2030	766
Thereafter	4,839



Total debt and finance lease obligations	$	9,027

Long-Term Debt

We had total long-term obligations, including the current portion and other short-term borrowings, of $9.0 billion and $8.5 billion at ~~September 30~~December 31, 2025 and June 30, 2025, respectively. All the notes represent unsecured obligations of Cardinal Health, Inc. and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. Interest is paid pursuant to the terms of the obligations. These notes are effectively subordinated to the liabilities of our subsidiaries, including trade payables of $3639.90 billion and $34.7 billion at ~~September 30~~December 31, 2025 and June 30, 2025, respectively.

proceeds of the notes issued, net of discounts, premiums, and debt issuance costs, were approximately $1.0 billion.

During the three months ended September 30, 2025, we repaid the full principal of $500 million of the 3.75% Notes due 2025 at maturity with available cash.

If we undergo a change of control, as defined in the notes, and if the notes receive specified ratings below investment grade by each of Standard & Poor's Ratings Services, Moody's Investors Services, and Fitch Ratings, any holder of the notes, excluding the debentures, can require with respect to the notes owned by such holder, or we can offer, to repurchase the notes at 101% of the principal amount plus accrued and unpaid interest.

Other Financing Arrangements

In addition to cash and equivalents and operating cash flow, other sources of liquidity at ~~September 30~~December 31, 2025 include a $3.0 billion commercial paper program backed by a $2.0 billion revolving credit facility that expires in February 2028 and a $1.0 billion 364-Day revolving credit facility that ~~expired~~expires in October ~~2025~~2026. We also had a $1.0 billion committed receivables sales facility through September 2028. At ~~September 30~~December 31, 2025, we had no amounts outstanding under our commercial paper program, revolving credit facility, or our committed receivables sales facility.

In September 2025, we renewed our committed receivables sales facility program through Cardinal Health 23 Funding, LLC (“CHF”) through September 28, 2028.

In October 2025, we renewed the 364-Day revolving credit facility, under which we have access to $1.0 billion of committed liquidity through October 6, 2026.

6. Commitments, Contingent Liabilities, and Litigation

Commitments

Generic Sourcing Venture with CVS Health

In July 2014, we established Red Oak Sourcing, LLC ("Red Oak Sourcing"), a U.S.-based generic pharmaceutical sourcing venture with CVS Health for an initial term of 10 years. Red Oak Sourcing negotiates generic pharmaceutical supply contracts on behalf of its participants. In August 2021, we amended our agreement to extend the term through June 2029. We are required to make quarterly payments to CVS Health for the term of the arrangement.

Contingencies

New York Opioid Stewardship Act

In 2018, the State of New York adopted the Opioid Stewardship Act (the "OSA"), which created an aggregate $100 million annual assessment on all manufacturers and distributors that was assessed based on each manufacturer or distributor's share of the total morphine milligram equivalents sold or distributed in New York, the applicability of which was ultimately limited to two years (2017 and 2018).

28Since ~~Cardinal~~fiscal ~~Health~~2021, |we Q1have ~~Fiscal~~made ~~2026~~certain ~~Form~~payments ~~10-Q~~to New York State for our portion of the assessment. However, we, and other distributors, challenged the OSA as unconstitutional. In May 2024, the New York Appellate Division held that the 2017 assessment was unconstitutionally retroactive, directing a refund of assessments paid for calendar year 2017, but upheld the 2018 assessment. In fiscal 2025, both parties agreed to a final settlement and in December 2025, we received payment and recognized a gain of $17 million in distribution, selling, general and administrative expenses in our condensed consolidated statements of earnings.

Notes to Financial Statements

assessment on all manufacturers and distributors that was assessed based on each manufacturer or distributor's share of the total morphine milligram equivalents sold or distributed in New York, the applicability of which was ultimately limited to two years (2017 and 2018).

Since fiscal 2021, we have made certain payments to New York State for our portion of the assessment. However, we, and other distributors, challenged the OSA as unconstitutional. In May 2024, the New York Appellate Division held that the 2017 assessment was unconstitutionally retroactive, directing a refund of assessments paid for calendar year 2017, but upheld the 2018 assessment. In fiscal 2025, both parties agreed to a settlement which will result in a refund of the portion we paid for calendar year 2017. The refund will be recognized upon receipt of the settlement.

Legal Proceedings

We become involved from time to time in disputes, litigation, and regulatory matters.

From time to time, we determine that products we distribute, source, manufacture, or market do not meet our specifications, regulatory requirements, or published standards. When we or a regulatory agency identify a potential quality or regulatory issue, we investigate and take appropriate corrective action. Such actions have led to product recalls, costs to repair or replace affected products, temporary interruptions in product sales, restrictions on importation, product liability claims and lawsuits, and can lead to action by regulators. Even absent an identified regulatory or quality issue or product recall, we can become subject to product liability claims and lawsuits.

~~From~~28 ~~time~~Cardinal toHealth ~~time,~~| weQ2 ~~become~~Fiscal ~~aware~~2026 ~~through~~Form employees, internal audits or other parties of possible compliance matters, such as complaints or concerns relating to accounting, internal accounting controls, financial reporting, auditing, or other ethical matters or relating to compliance with laws such as healthcare fraud and abuse, anti10-corruption, or anti-bribery laws. When we become aware of such possible compliance matters, we investigate internally and take appropriate corrective action. In addition, from time to time, we receive subpoenas or requests for information from various federal or state agencies relating to our business or to the business of a customer, supplier, or other industry participants. Internal investigations, subpoenas, or requests for information could directly or indirectly lead to the assertion of claims or the commencement of legal proceedings against us or result in sanctions.Q

WeNotes ~~have been named from time~~ to ~~time~~Financial in qui tam actions initiated by private third parties. In such actions, the private parties purport to act on behalf of federal or state governments, allege that false claims have been submitted for payment by the government and may receive an award if their claims are successful. After a private party has filed a qui tam action, the government must investigate the private party's claim and determine whether to intervene in and take control over the litigation. These actions may remain under seal while the government makes this determination. If the Statements

~~government~~have ~~declines~~led to ~~intervene~~product recalls, ~~the~~costs ~~private~~to ~~party~~repair ~~may~~or ~~nonetheless~~replace ~~continue~~affected toproducts, ~~pursue~~temporary ~~the~~interruptions ~~litigation~~in product sales, restrictions on ~~his~~importation, orproduct ~~her~~liability ~~own~~claims ~~purporting~~and lawsuits and can lead to ~~act~~action onby ~~behalf~~regulators. ofEven ~~the~~absent ~~government~~an identified regulatory or quality issue or product recall, we can become subject to product liability claims and lawsuits.

WeFrom ~~accrue~~time ~~for~~to ~~contingencies~~time, ~~related~~we become aware through employees, internal audits or other parties of possible compliance matters, such as complaints or concerns relating to ~~disputes~~accounting, ~~litigation~~internal accounting controls, ~~and~~financial ~~regulatory~~reporting, auditing, or other ethical matters ifor itrelating isto ~~probable~~compliance ~~that~~with alaws ~~liability~~such ~~has~~as ~~been~~healthcare ~~incurred~~fraud and ~~the~~abuse, ~~amount~~anti-corruption ofor ~~the~~anti-bribery ~~loss~~laws. ~~can~~When bewe ~~reasonably~~become ~~estimated.~~aware ~~Because~~of ~~these~~such possible compliance matters, ~~are~~we ~~inherently~~investigate ~~unpredictable~~internally and ~~unfavorable~~take ~~developments~~appropriate orcorrective ~~resolutions~~action. ~~can~~In ~~occur~~addition, ~~assessing~~from ~~contingencies~~time isto ~~highly~~time, ~~subjective~~we ~~and~~receive ~~requires~~subpoenas ~~judgments~~or ~~about~~requests ~~future~~for ~~events.~~information Wefrom ~~regularly~~various ~~review~~federal ~~contingencies~~or tostate ~~determine~~agencies ~~whether~~relating to our ~~accruals~~business ~~and~~or ~~related~~to ~~disclosures~~the ~~are~~business ~~adequate~~of a customer, supplier or other industry participants. ~~The~~Internal ~~amount~~investigations, subpoenas or requests for information could directly or indirectly lead to the assertion of ~~ultimate~~claims ~~loss~~or ~~may~~the ~~differ~~commencement ~~from~~of ~~these~~legal ~~estimates~~proceedings against us or result in sanctions.

We have been named from time to time in qui tam actions initiated by private third parties. In such actions, the private parties purport to act on behalf of federal or state governments, allege that false claims have been submitted for payment by the government and may receive an award if their claims are successful. After a private party has filed a qui tam action, the government must investigate the private party's claim and determine whether to intervene in and take control over the litigation. These actions may remain under seal while the government makes this determination. If the government declines to intervene, the private party may nonetheless continue to pursue the litigation on his or her own purporting to act on behalf of the government.

We accrue for contingencies related to disputes, litigation and regulatory matters if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because these matters are inherently unpredictable and unfavorable developments or resolutions can occur, assessing contingencies is highly subjective and requires judgments about future events. We regularly review contingencies to determine whether our accruals and related disclosures are adequate. The amount of ultimate loss may differ from these estimates.

We recognize income from the favorable outcome of litigation when we receive the associated cash or assets.

We recognize estimated loss contingencies for certain litigation and regulatory matters and income from favorable resolution of litigation in litigation (recoveries)/charges, net in our condensed consolidated statements of earnings; however, losses and recoveries of lost profits from disputes that occur in the ordinary course of business are included within segment profit.

Because loss contingencies are inherently unpredictable and unfavorable developments or resolutions can occur, the assessment is highly subjective and requires judgments about future events. We regularly review litigation matters to determine whether an accrual is appropriate or, where applicable, whether our accrual is adequate. The amount of ultimate loss may differ materially from amounts accrued, whether as a result of settlement discussions, a judicial decision or verdict, or otherwise. Unless otherwise disclosed, we are not able to estimate a range of reasonably possible losses, or additional losses for these matters.

Opioid Lawsuits and Investigations

As of ~~September 30~~December 31, 2025, we have $4.3 billion accrued for the opioid-related matters described below, of which $~~486~~477 million is included in other accrued liabilities and the remainder is included in deferred income taxes and other liabilities in our condensed consolidated balance sheets. During ~~three~~the six months ended ~~September 30~~December 31, 2025 and fiscal year 2025, we made payments totaling $403 million and $798 million, respectively, which included our annual payments under the agreement to settle the vast majority of the opioid lawsuits filed by states and local governmental entities and payments related to the settlement ~~agreements~~agreement with the City of Baltimore and classes of third-party payors and acute care hospitals.

During the ~~three~~six months ended ~~September 30~~December 31, 2025 and fiscal year 2025, there were no material expenses recognized for these matters.

States & Political Subdivisions

In April 2022, we along with two other national distributors (collectively, the "Distributors"), without admitting liability or wrongdoing, became parties to National Opioid Settlement Agreement ("the NOSA") to settle the vast majority lawsuits and claims brought by states and political subdivisions related to the distribution of opioid pain medications. In addition to the Distributors, parties to the NOSA include 48 states, the District of Columbia and 5 U.S. territories. The NOSA also resulted in the resolution of the opioid-related claims of over 99 percent of political subdivisions in settling states (together with settling states and territories, the "Settling Governmental Entities").

~~Cardinal~~To ~~Health~~date, |we Q1have ~~Fiscal~~paid ~~2026~~the ~~Form~~Settling 10Governmental Entities approximately $2.2 billion and we expect to pay the Settling Governmental Entities additional amounts up to $4.1 billion through 2038. As required under the NOSA, a monitor is overseeing compliance with the Injunctive Relief provisions of the NOSA until 2027 and the distributors have engaged a third-Qparty 29vendor to act as a clearinghouse for data aggregation and reporting, which distributors will fund until 2032.

Notes to Financial Statements

claims brought by states and political subdivisions related to the distribution of opioid pain medications. In addition to the Distributors, parties to the NOSA include 48 states, the District of Columbia, and 5 U.S. territories. The NOSA also resulted in the resolution of the opioid-related claims of over 99 percent of political subdivisions in settling states (together with settling states and territories, the "Settling Governmental Entities").

Through October 2025, we have paid the Settling Governmental Entities approximately $2.2 billion and we expect to pay the Settling Governmental Entities additional amounts up to $4.1 billion through 2038. As required under the NOSA, a monitor is overseeing compliance with the Injunctive Relief provisions of the NOSA until 2027 and the distributors have engaged a third-party vendor to act as a clearinghouse for data aggregation and reporting, which distributors will fund until 2032.

West Virginia subdivisions and Native American tribes were not a part of the NOSA. In July 2022, we entered into separate agreements to settle the opioid-related claims of the majority of remaining West Virginia subdivisions and Native American Tribes for approximately $124 million over eleven years and $136 million over five years, respectively.

We have now resolved the opioid-related claims of all 50 states and the District of Columbia; however, lawsuits brought by certain subdivisions remain outstanding.

In July 2022, a judgment in favor of the Distributors was entered in a bench trial before a federal judge in West Virginia in a case brought by Cabell County and City of Huntington. In October 2025, the United States Court of Appeals for the Fourth Circuit vacated the district court's judgment and remanded the case for further proceedings. A hearing is scheduled for March, 2026. We intend to vigorously defend ourselves in this matter.



29			Cardinal Health \| Q2 Fiscal 2026 Form 10-Q


Notes to Financial Statements

Private Plaintiffs

The NOSA does not address claims by private parties, which includes unions and other health and welfare funds, hospital systems and other healthcare providers, businesses, and individuals alleging personal injury. ~~There~~To ~~were~~date, there are approximately ~~195~~193 lawsuits brought by private plaintiffs pending ~~as of October 28, 2025~~. Of these, approximately 51 are purported class actions. The causes of action asserted by these plaintiffs are similar to those asserted by public plaintiffs. We are vigorously defending ourselves in all of these matters.

Following resolution discussions with certain private plaintiffs, during the six months ended December 31, 2024, Distributors finalized agreements with classes of third-party payors and acute care hospitals. Our portion of these settlements totaled $213 million. The settlement with the class of third-party payors was approved by the court in January 2025 and was finalized in August 2025. The settlement with the class of acute care hospitals was approved by the court in March 2025 and became final in April 2025.

Insurance ~~Matters~~Litigation

We are involved in lawsuits in Ohio State court with insurers related to their obligations to reimburse us for defense and indemnity costs in connection with the lawsuits described above. A hearing in one of these matters is scheduled for February 5, 2026. An unfavorable outcome in ~~these~~this ~~coverage~~matter ~~matters~~ may result in a change in loss reserves related to opioid litigation recorded by our captive insurance company, which would negatively impact cash flow.

During the ~~three~~six months ended ~~September 30~~ December 31, 2025, we received $5 million in insurance recoveries related to opioid matters, which were recorded in the Pharma segment. During fiscal 2025, we received $25 million in insurance recoveries related to opioid matters. $12 million of the recoveries from our insurers were recorded in the Pharma segment. We have not recorded a receivable for any additional recoveries related to these insurance litigation matters as of ~~September 30~~December 31, 2025.

Department of Justice Civil Investigative Demand

In November 2023, we received a Civil Investigative Demand ("CID") from the Department of Justice focused on potential violations of the Anti-Kickback Statute and False Claims Act in connection with a 2022 transaction in which we purchased a minority ownership interest in a rheumatology managed services organization and a group purchasing organization. We are cooperating with this investigation.

Cordis IVC Filter Matters

We have been named as a defendant in product liability lawsuits involving claims by plaintiffs that allege personal injuries associated with the use of inferior vena cava ("IVC") filter products. These lawsuits sought a variety of remedies, including unspecified monetary damages. The divestiture of the Cordis business did not include product liability related to the IVC filters in the U.S. and Canada, which we retained.

In April 2023, we executed a settlement agreement that will resolve approximately 4,375 claims for $275 million, which we have paid into a qualified settlement fund. Payments to qualified implantees are being made out of the qualified settlement fund and we expect continued payments as additional plaintiffs meet the procedural requirements.

We have also entered into other agreements, which, in addition to the settlement discussed above, resolved the vast majority of IVC filter product liability claims. These settlements did not resolve all IVC filter product liability claims, and we intend to continue to vigorously defend ourselves in the remaining lawsuits.

At ~~September 30~~December 31, 2025, we had a total of $4036 million accrued for losses and legal defense costs, related to the IVC filter product liability lawsuits in our condensed consolidated balance sheets, which includes the $3735 million in the qualified settlement fund.

Tax Contingency

On February 2, 2026, we received a Notice of Proposed Adjustment (NOPA) from the Internal Revenue Service (IRS), as part of our ongoing FY15-FY20 audit cycle, related to a restructuring in connection with our July 2017 acquisition of the Patient Recovery business. The IRS is asserting that the transaction should be recharacterized in a manner that could create additional federal income tax liability of approximately $160 million, plus interest. We routinely assess the likelihood of adverse outcomes resulting from audits and examinations to determine the adequacy of our tax reserves and we believe we have adequate reserves for all tax matters; however, the ultimate outcome of disputes of this nature is uncertain and if the IRS were to prevail on its assertions in connection with this matter, the assessed tax and deficiency interest would impact our financial results and cash flow.

Antitrust Litigation Proceeds

We recognized income for net recoveries in class action antitrust lawsuits in which we were a class member or plaintiff of $43 19 million during both the three and six months ended December 31, ~~September~~2025 30and $16 million and $59 million during the three and six months ended December 31, 2024, respectively.

30 Cardinal Health | Q1 Fiscal 2026 Form 10-Q

Notes to Financial Statements

7. Income Taxes

Fluctuations in our provision for income taxes as a percentage of ~~our~~ pre-tax earnings (“effective tax rate”) are due to changes in international and U.S. state effective tax rates resulting from our business mix and discrete items.

Effective Tax Rate

During the three ~~months~~and ~~ended~~six ~~September~~months 30ended December 31, 2025 ~~and 2024~~, the effective tax rate was 24 25.12 percent and 23 24.07 percent, respectively.

During the three and six months ended December 31, 2024, the effective tax rate was 21.4 percent and 22.2 percent, respectively.



30			Cardinal Health \| Q2 Fiscal 2026 Form 10-Q


Notes to Financial Statements

Unrecognized Tax Benefits

We had $~~894~~903 million and $879 million of unrecognized tax benefits, at ~~September 30~~December 31, 2025 and June 30, 2025, respectively. The ~~September 30~~December 31, 2025 and June 30, 2025 balances include $877 million and $871 million of unrecognized tax benefits, respectively, that if recognized, would have an impact on the effective tax rate.

At ~~September 30~~December 31, 2025 and June 30, 2025, we had $7077 million and $65 million, respectively, accrued for the payment of interest and penalties related to unrecognized tax benefits, which we recognize in the provision for income taxes in the condensed consolidated statements of earnings. These balances are gross amounts before any tax benefits and are included in deferred income taxes and other liabilities in the condensed consolidated balance sheets.

It is reasonably possible that there could be a change in the amount of unrecognized tax benefits within the next 12 months due to activities of the U.S. Internal Revenue Service ("IRS") or other taxing authorities, possible settlement of IRS and other audit issues, reassessment of existing unrecognized tax benefits or the expiration of statutes of limitations.

Other Tax Matters

We file income tax returns in the U.S. federal jurisdiction, various U.S. state ~~and local~~ jurisdictions, and various foreign jurisdictions. With few exceptions, we are subject to audit by taxing authorities for fiscal years 2015 through the current fiscal year.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law, which includes a broad range of tax reform provisions. The OBBBA includes changes to existing tax law, including extending or making permanent certain business and international tax measures initially established under the 2017 Tax Cuts and Jobs Act ("Tax Act"). We have evaluated the impact of the OBBBA and determined that it did not have a material effect on the Company’s financial statements for the three ~~months~~and ~~ended~~six ~~September~~months 30ended December 31, 2025. We will continue to assess the implications of the OBBBA as further guidance becomes available but do not expect the legislation to have a material impact on the effective tax rate in future periods.

8. Fair Value Measurements

Assets and Liabilities Measured on a Recurring Basis

The following tables present the fair values for assets and (liabilities) measured on a recurring basis at:

	September 30, 2025
	December 31, 2025
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	~~2,523~~266	$	—	$	—	$	~~2,523~~266
Other investments (1)	~~109~~112		—		—		~~109~~112
Liabilities:
Forward contracts (2)	—		(3425)		—		(3425)
Share-based awards (3)	—		—		(~~910~~1,173)		(~~910~~1,173)


	June 30, 2025
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	1,672	$	—	$	—	$	1,672

Other investments (1)	108		—		—		108
Liabilities:
Forward contracts (2)	—		(48)		—		(48)
Share-based awards (3)	—		—		(843)		(843)

(1)The other investments balance includes investments in mutual funds, which offset fluctuations in deferred compensation liabilities. These mutual funds invest in the equity securities of companies with both large and small market capitalization and high quality fixed income debt securities. The fair value of these investments is determined using quoted market prices.

(2) The fair value of interest rate swaps, foreign currency contracts, and net investment hedges is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. The fair value of these derivative contracts, which are subject to master netting arrangements under certain circumstances, is presented on a gross basis in prepaid expenses and other, other assets, other accrued liabilities, and deferred income taxes and other liabilities within the condensed consolidated balance sheets.

(3) The shared-based awards are ~~comprised of~~ liability-classified awards, as defined under ASC 718, resulting from acquisitions by ~~the~~The Specialty Alliance. These are presented in deferred income taxes and other liabilities within the condensed consolidated balance sheets. The fair value of ~~the~~The Specialty Alliance Units ~~are~~is determined using the discounted cash flow method. ~~These~~which ~~are~~utilizes ~~presented~~significant inunobservable ~~deferred~~inputs, ~~income~~including ~~taxes~~the ~~and~~discount ~~other~~rate ~~liabilities~~of ~~within~~7.5%. Significant changes to assumptions used in the ~~consolidated~~valuation ~~balance~~may ~~sheets.~~have ~~See~~a ~~Note~~material 13impact ~~for~~on ~~additional~~the ~~information~~fair value of The Specialty Alliance Units.

9.Changes ~~Financial~~in ~~Instruments~~Level 3 Recurring Fair Value Measurements

~~We utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations.~~ The ~~primary~~following ~~risks~~tables ~~managed~~reconcile ~~through~~ the ~~use~~changes ofin ~~derivative~~fair ~~instruments~~value ~~include~~for ~~interest~~the ~~rate~~liabilities ~~risk~~classified ~~and~~within ~~currency~~Level ~~exchange~~3 ~~risk.~~of Wethe dofair ~~not~~value ~~use~~hierarchy ~~derivative instruments~~ for ~~trading or speculative purposes. While~~ the ~~majority~~three ofand ~~our~~six ~~derivative~~months ~~instruments~~ended ~~are~~December ~~designated as hedging instruments~~31, ~~we also enter into derivative instruments that are designed to hedge a risk, but are not designated as hedging~~ 2025:

31 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q 31


Notes to Financial Statements

instruments. These derivative instruments are adjusted to current fair value through earnings at the end of each period. We are exposed to counterparty credit risk on all of our derivative instruments. Accordingly, we have established and maintain strict counterparty credit guidelines and only enter into derivative instruments with major financial institutions that are rated investment grade or better. We do not have significant exposure to any one counterparty and we believe the risk of loss is remote. Additionally, we do not require collateral under these agreements.


(in millions)	The Specialty Alliance Units
Fair Value at September 30, 2025	$	910
Acquisitions	213
Vesting (1)	66
Fair Value Adjustment (1)	(10)
Repurchases	(6)
Fair Value at December 31, 2025	$	1,173


(in millions)	The Specialty Alliance Units
Fair Value at June 30, 2025	$	843
Acquisitions	233
Vesting (1)	119
Fair Value Adjustment (1)	—
Repurchases	(22)
Fair Value at December 31, 2025	$	1,173

(1)For the three and six months ended December 31, 2025, there was $56 million and $119 million of expense, respectively, recorded to acquisition-related cash and share-based compensation costs in the condensed consolidated statements of earnings.

9. Financial Instruments

We utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations. The primary risks managed through the use of derivative instruments include interest rate risk and currency exchange risk. We do not use derivative instruments for trading or speculative purposes. While the majority of our derivative instruments are designated as hedging instruments, we also enter into derivative instruments that are designed to hedge a risk but are not designated as hedging instruments. These derivative instruments are adjusted to current fair value through earnings at the end of each period. We are exposed to counterparty credit risk on all of our derivative instruments. Accordingly, we have established and maintain strict counterparty credit guidelines and only enter into derivative instruments with major financial institutions that are rated investment grade or better. We do not have significant exposure to any one counterparty and we believe the risk of loss is remote. Additionally, we do not require collateral under these agreements.

Interest Rate Risk Management

We are exposed to the impact of interest rate changes. Our objective is to manage the impact of interest rate changes on cash flows and the market value of our borrowings. We utilize a mix of debt maturities on our fixed-rate debt to manage changes in interest rates. In addition, we enter into interest rate swaps to further manage our exposure to interest rate variations related to our borrowings and to lower our overall borrowing costs.

Currency Exchange Risk Management

We conduct business in several major international currencies and are subject to risks associated with changing foreign exchange rates. Our objective is to reduce earnings and cash flow volatility associated with foreign exchange rate changes to allow management to focus its attention on business operations. Accordingly, we enter into various contracts that change in value as foreign exchange rates change to protect the value of existing foreign currency assets and liabilities, commitments, and anticipated foreign currency revenue and expenses.

Fair Value Hedges

We enter into pay-floating interest rate swaps to hedge the changes in the fair value of fixed-rate debt resulting from fluctuations in interest rates. These contracts are designated and qualify as fair value hedges. Accordingly, the gain or loss recorded on the pay-floating interest rate swaps is directly offset by the change in fair value of the underlying debt. Both the derivative instrument and the underlying debt are adjusted to market value at the end of each period with any resulting gain or loss recorded in interest expense, net in the condensed consolidated statements of earnings. For the three and six months ended ~~September~~December 3031, 2025 and 2024, there were no gains or losses recorded to interest expense as changes in the market value of our derivative instruments offset changes in the market value of the underlying debt.

During the ~~three~~six months ended ~~September~~December 3031, 2025, we entered into pay-floating interest rate swaps with total notional amounts of $300 million. These swaps ~~were~~have been designated as fair value hedges of our fixed rate debt and are included in deferred income taxes and other liabilities in our condensed consolidated balance sheets.

Cash Flow Hedges

We enter into derivative instruments to hedge our exposure to changes in cash flows attributable to interest rate and foreign currency fluctuations associated with certain forecasted transactions. These derivative instruments are designated and qualify as cash flow hedges. Accordingly, the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive loss and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings.

~~Pre-tax~~Gains ~~gains~~and losses recognized in other comprehensive income were immaterial for both the three and six months ended ~~September~~December 3031, 2025 and 2024, respectively. Gains and losses recognized in accumulated other comprehensive loss and reclassified into earnings were immaterial for both the three and six months ended ~~September~~December 3031, 2025 and 2024, respectively. Gains currently included within accumulated other comprehensive ~~income~~loss associated with our cash flow hedges to be reclassified into net earnings within the next 12 months are immaterial.



32			Cardinal Health \| Q2 Fiscal 2026 Form 10-Q


Notes to Financial Statements

Net Investment Hedges

We hedge the foreign currency risk associated with certain net investment positions in foreign subsidiaries. To accomplish this, we enter into cross-currency swaps that are designated as hedges of net investments.

In September 2025, we entered into ¥18 billion ($120 million) cross-currency swaps maturing in September 2027.

In September 2025, we terminated the ¥18 billion ($120 million) cross-currency swaps entered into in September 2023 and received settlement in cash of $3 million, recorded in our condensed consolidated statements of cash flows.

In December 2025, we partially terminated the €32 million ($37 million) cross-currency swaps entered into in March 2023 and paid a settlement in cash of $3 million, recorded in our condensed consolidated statements of cash flows.

Cross-currency swaps designated as net investment hedges are marked to market using the current spot exchange rate as of the end of the period, with gains and losses included in the foreign currency translation component of accumulated other comprehensive loss until the sale or substantial liquidation of the underlying net investments. To the extent the cross-currency swaps designated as net investment hedges are not highly effective, changes in carrying value attributable to the change in spot rates are recorded in earnings.

Pre-tax gains and losses from net investment hedges recorded in the foreign currency translation component of accumulated other comprehensive loss were immaterial ~~for~~during both the three and six months ended ~~September~~December 3031, 2025 and 2024, respectively. Gains recognized in interest expense, net in the condensed consolidated statements of earnings for the portion of the net investment hedges excluded from the assessment of hedge effectiveness were immaterial during both the three and six months ended ~~September~~December 3031, 2025 and 2024, respectively.

32 Cardinal Health | Q1 Fiscal 2026 Form 10-Q

Notes to Financial Statements

Economic (Non-Designated) Hedges

We enter into foreign currency contracts to manage our foreign exchange exposure related to sales transactions, intercompany financing transactions, and other balance sheet items subject to revaluation that do not meet the requirements for hedge accounting treatment. Accordingly, these derivative instruments are adjusted to current market value at the end of each period through earnings. The gain or loss recorded on these instruments is substantially offset by the remeasurement adjustment on the foreign currency denominated asset or liability. The settlement of the derivative instrument and the remeasurement adjustment on the foreign currency denominated asset or liability are both recorded in other (income~~)/expense~~, net ~~in the consolidated statement of earnings~~. We recorded an immaterial ~~loss~~gains and losses during both the three and six months ended ~~September~~December 3031, 2025 and 2024, respectively. The principal currencies managed through foreign currency contracts are ~~the~~ Canadian dollar, ~~Chinese renminbi,~~ Mexican peso, ~~Brazilian~~Chinese ~~real~~renminbi, Thai baht and ~~Indian~~Philippine ~~rupee~~peso.

Fair Value of Financial Instruments

The carrying amounts of cash and equivalents, trade receivables, ~~net,~~ accounts payable, and other accrued liabilities at ~~September 30~~December 31, 2025 and June 30, 2025 approximate fair value due to their short-term maturities.

The following table summarizes the estimated fair value of our long-term obligations and other short-term borrowings compared to the respective carrying amounts at:

(in millions)	~~September~~December 3031, 2025		June 30, 2025
Estimated fair value	$	8,~~126~~208	$	8,388
Carrying amount	9,~~032~~027		8,527

The fair value of our long-term obligations and other short-term borrowings is estimated based on either the quoted market prices for the same or similar issues or other inputs derived from available market information, which represents a Level 2 measurement.

10. Shareholders' Deficit

~~During~~We ~~the~~repurchased ~~three~~$750 million ~~months~~and ~~ended~~$375 million ~~September~~of ~~30,~~our ~~2025~~common shares, wein ~~entered~~the ~~into~~aggregate, anthrough ~~accelerated~~ share repurchase ~~("ASR")~~programs ~~program~~during tothe ~~repurchase~~six ~~common~~months ~~shares~~ended ~~for~~December 31, an2025 ~~aggregate~~and ~~purchase~~2024, ~~price of $375 million~~respectively. We ~~received~~funded anthe ~~initial~~repurchases ~~delivery~~with ofavailable 2cash.0 ~~million~~The common shares ~~using~~repurchased aare ~~reference~~held ~~price~~in oftreasury ~~$148.12.~~to ~~The~~be ~~program~~used ~~will~~for ~~conclude~~general bycorporate ~~October 31, 2025~~purposes.

~~During~~The ~~the~~following ~~three~~table ~~months~~presents ~~ended~~the ~~September~~share ~~30, 2024, we entered into an ASR program to~~ repurchase ~~common~~programs ~~shares~~executed ~~for~~during anthe ~~aggregate~~six ~~purchase~~months ~~price~~ended ofDecember ~~$375 million. We received an initial delivery of 2.7 million common shares using a reference price of $109.65. The program concluded on October 30~~31, ~~2024~~2025 atand ~~a volume weighted average price per common share of $110.10 resulting in a final delivery of 0.7 million common shares.~~2024:

We funded the repurchases with available cash. The common shares repurchased are held in treasury to be used for general corporate purposes.


Quarter Entered	Date Concluded	Aggregate Purchase Price (in millions)	Initial Shares (in millions)	Reference Price	Final Shares (in millions)	Weighted Average Price per Common Share
Q1 FY26	10/31/2025	$375	2.0	$148.12	0.4	$151.88
Q2 FY26	12/15/2025	$375	1.6	$190.22	0.3	$200.00
Q1 FY25	10/30/2024	$375	2.7	$109.65	0.7	$110.10

During the six months ended December 31, 2025 and 2024, we paid $8 million and $15 million for excise taxes, respectively, related to the completion of prior Accelerated Share Repurchase programs.

During the three months ended December 31, 2024, we retired 56 million of common stock shares without par value.



33			Cardinal Health \| Q2 Fiscal 2026 Form 10-Q


Notes to Financial Statements

Accumulated Other Comprehensive Loss

The following tables summarize the changes in the balance of accumulated other comprehensive loss by component and in total:

(in millions)	ForeignCurrencyTranslationAdjustments		UnrealizedGain/(Loss) onDerivatives,net of tax		Accumulated OtherComprehensiveLoss
Balance at June 30, 2025	$	(141)	$	(14)	$	(155)
Other comprehensive (loss)/income, before reclassifications	(4)		2		(2)
Other comprehensive income, before reclassifications	5		3		8
Amounts reclassified to earnings	—		(26)		(26)
Total other comprehensive loss attributable to Cardinal Health, Inc., net of tax expense of $1 million	(4)		—		(4)
Total other comprehensive income/(loss) attributable to Cardinal Health, Inc., net of tax expense of $4 million	5		(3)		2
Balance at September 30, 2025	$	(145)	$	(14)	$	(159)
Balance at December 31, 2025	$	(136)	$	(17)	$	(153)

(in millions)	ForeignCurrencyTranslationAdjustments		UnrealizedGain/(Loss) onDerivatives,net of tax		Accumulated OtherComprehensiveLoss
Balance at June 30, 2024	$	(138)	$	(29)	$	(167)
Other comprehensive income, before reclassifications	5		6		11
Other comprehensive income/(loss), before reclassifications	(11)		2		(9)
Amounts reclassified to earnings	—		1(4)		1(4)
Total other comprehensive income attributable to Cardinal Health, Inc., net of tax benefit of $5 million	5		7		12
Total other comprehensive loss attributable to Cardinal Health, Inc., net of tax expense of $2 million	(11)		(2)		(13)
Balance at September 30, 2024	$	(133)	$	(22)	$	(155)
Balance at December 31, 2024	$	(149)	$	(31)	$	(180)

11. Earnings Per Share Attributable to Cardinal Health, Inc.

The following ~~table~~tables ~~reconciles~~reconcile the number of common shares used to compute basic and diluted earnings per share attributable to Cardinal Health, Inc. ("EPS"):

	Three Months Ended September 30,
	Three Months Ended December 31,
(in millions)	2025	2024
Weighted-average common shares–basic	~~238~~236	~~243~~242
Effect of dilutive securities:
Employee stock options, restricted share units, and performance share units	1	2
Employee stock options, restricted share units and performance share units	1	1
Weighted-average common shares–diluted	~~239~~237	~~245~~243

The potentially dilutive employee stock options, restricted share units, and performance share units that were excluded from the


	Six Months Ended December 31,
(in millions)	2025	2024
Weighted-average common shares–basic	237	242
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	1	1
Weighted-average common shares–diluted	238	243

~~Cardinal~~For ~~Health~~the |three Q1and ~~Fiscal~~six ~~2026~~months ~~Form~~ended ~~10-Q~~December 31, 332025 and 2024, immaterial restricted share units and performance share units were excluded from the computation of diluted EPS, as they were anti-dilutive.

Notes to Financial Statements

computation of diluted EPS were immaterial for the three months ended September 30, 2025 and 2024.

12. Segment Information

We operate under two reportable segments: Pharmaceutical and Specialty Solutions ("Pharma") and Global Medical Products and Distribution ("GMPD"). All remaining operating segments that are not significant enough to require separate reportable segment disclosures are included in Other, which is comprised of Nuclear and Precision Health Solutions, at-Home Solutions, and OptiFreight® Logistics. The factors for determining the reportable segments include the manner in which management evaluates performance for purposes of allocating resources and assessing performance combined with the nature of the individual business activities.

Our Pharma segment distributes branded and generic pharmaceutical, specialty pharmaceutical, and over-the-counter healthcare and consumer products in the United States. This segment also provides services to pharmaceutical manufacturers and healthcare providers for specialty pharmaceutical products; provides pharmacy management services to hospitals and operates a limited number of pharmacies, including pharmacies in community health centers; repackages generic pharmaceuticals and over-the-counter healthcare products; and includes our managed services organization platforms for physician offices.

Our GMPD segment manufactures, sources, and distributes Cardinal Health ~~brand~~branded medical, surgical, and laboratory products, which are sold in the United States, Canada, Europe, Asia, and other markets. This segment also distributes a broad range of medical, surgical, and laboratory products known as national brand products to hospitals, ambulatory surgery centers, clinical laboratories, and other healthcare providers in the United States and Canada.

The remaining three non-reportable operating segments included in Other are Nuclear and Precision Health Solutions, at-Home Solutions, and OptiFreight® Logistics. These operating segments respectively operate nuclear pharmacies and radiopharmaceutical manufacturing facilities, distribute medical products to patients' homes in the United States, and provide supply chain services and solutions to our customers.



34			Cardinal Health \| Q2 Fiscal 2026 Form 10-Q


Notes to Financial Statements

Revenue

The following ~~table~~tables ~~presents~~present revenue for the two reportable segments and disaggregated revenue within the remaining operating segments, included in Other, and Corporate:

	Three Months Ended September 30,
	Three Months Ended December 31,
(in millions)	2025		2024
Pharmaceutical and Specialty Solutions	$	5960,~~205~~669	$	4750,~~990~~849
Global Medical Products and Distribution	3,~~184~~259		3,~~123~~154
Nuclear and Precision Health Solutions	~~436~~440		~~373~~372
at-Home Solutions	1,~~115~~185		~~739~~835
OptiFreight® Logistics	9099		7476
Other	1,~~641~~724		1,~~186~~283
Total segment revenue	6465,~~030~~652		5255,~~299~~286
Corporate (1)	(2125)		(22)
Total revenue	$	6465,~~009~~627	$	5255,~~277~~264


	Six Months Ended December 31,
(in millions)	2025		2024
Pharmaceutical and Specialty Solutions	$	119,874	$	98,839
Global Medical Products and Distribution	6,443		6,277
Nuclear and Precision Health Solutions	876		745
at-Home Solutions	2,300		1,574
OptiFreight® Logistics	189		150
Other	3,365		2,469
Total segment revenue	129,682		107,585
Corporate (1)	(46)		(44)
Total revenue	$	129,636	$	107,541

(1)Corporate revenue consists of the elimination of inter-segment revenue and other revenue not allocated to the segments.

The following ~~table~~tables ~~presents~~present revenue by geographic area:

	Three Months Ended September 30,
	Three Months Ended December 31,
(in millions)	2025		2024
United States	$	6365,~~611~~217	$	5154,~~891~~858
International	~~419~~435		~~408~~428
Total segment revenue	6465,~~030~~652		5255,~~299~~286
Corporate (1)	(2125)		(22)
Total revenue	$	6465,~~009~~627	$	5255,~~277~~264


	Six Months Ended December 31,
(in millions)	2025		2024
United States	$	128,828	$	106,749
International	854		836
Total segment revenue	129,682		107,585
Corporate (1)	(46)		(44)
Total revenue	$	129,636	$	107,541

(1)Corporate revenue consists of the elimination of inter-segment revenue and other revenue not allocated to the segments.

Segment Profit

The Company’'s Chief Executive Officer, the chief operating decision maker ("CODM"), evaluates segment performance based on segment profit, among other measures. Segment profit is segment revenue, less segment cost of products sold, less segment distribution, selling, general and administrative ("SG&A") expenses. Segment SG&A expenses include share-based compensation expense as well as allocated corporate technology and shared ~~functions~~function expenses, including corporate management, corporate finance, financial and customer care shared services, human resources, information technology, and legal and compliance, including certain litigation defense costs. Corporate expenses are allocated to the operating segments based on headcount, level of benefit provided, and other ratable allocation methodologies. The results attributable to noncontrolling interests are recorded within segment profit.

We do not allocate the following items to our segments:

•last-in first-out, or ("LIFO"), inventory charges/(credits);

•state opioid assessment related to prior fiscal years;

34 Cardinal Health | Q1 Fiscal 2026 Form 10-Q

Notes to Financial Statements

•restructuring and employee severance;

•amortization and other acquisition-related costs;

•acquisition-related cash and share-based compensation costs;

•impairments and (gain)/loss on disposal of assets, net;

•litigation (recoveries)/charges, net;

•other (income)/expense, net;

•interest expense, net;

•provision for/(benefit from) income taxes

In addition, certain investment spending, ~~and~~ certain portions of enterprise-wide incentive compensation and other spending are not allocated to the segments. Investment spending generally includes the first-year spend for certain projects that require incremental investments in the form of additional operating expenses. Because approval for these projects is dependent on executive management, we retain these expenses at Corporate. Investment spending within Corporate was $1615 million for both the three months ended December 31, 2025 and 2024, respectively, and $31 million and $12 27 million for the ~~three~~six months ended ~~September 30~~December 31, 2025 and 2024, respectively.

~~The~~35 ~~following~~Cardinal ~~table~~Health ~~presents~~| ~~segment~~Q2 ~~profit~~Fiscal ~~for~~2026 ~~the~~Form ~~two reportable segments and the remaining operating segments, included in Other, and Corporate:~~10-Q

	Three Months Ended September 30, 2025
(in millions)	Pharma		GMPD		Other		Total
Segment revenue	$	59,205	$	3,184	$	1,641	$	64,030
Cost of product sold	57,857		2,633		1,221		61,711
SG&A	681		505		254		1,440
Total segment expenses	58,538		3,138		1,475		63,151
Segment profit	$	667	$	46	$	166	$	879
Corporate (1)							(211)
Consolidated operating earnings							$	668


Notes to Financial Statements

	Three Months Ended September 30, 2024
(in millions)	Pharma		GMPD		Other		Total
Segment revenue	$	47,990	$	3,123	$	1,186	$	52,299
Cost of product sold	46,909		2,604		884		50,397
SG&A	551		511		198		1,260
Total segment expenses	47,460		3,115		1,082		51,657
Segment profit	$	530	$	8	$	104	$	642
Corporate (1)							(74)
Consolidated operating earnings							$	568

The following tables present segment profit for the two reportable segments and the remaining operating segments, included in Other:

(1) Corporate revenue and expenses consists of the elimination of inter-segment revenue and other revenue and expenses not allocated to the segments.


	Three Months Ended December 31, 2025
(in millions)	Pharma		GMPD		Other		Total
Segment revenue	$	60,669	$	3,259	$	1,724	$	65,652

Cost of product sold	59,243		2,720		1,291		63,254
SG&A	739		502		254		1,495
Total segment expenses	59,982		3,222		1,545		64,749

Segment profit	$	687	$	37	$	179	$	903
Corporate (1)							(196)
Consolidated operating earnings							$	707


	Three Months Ended December 31, 2024
(in millions)	Pharma		GMPD		Other		Total
Segment revenue	$	50,849	$	3,154	$	1,283	$	55,286

Cost of product sold	49,750		2,624		969		53,343
SG&A	568		512		196		1,276
Total segment expenses	50,318		3,136		1,165		54,619

Segment profit	$	531	$	18	$	118	$	667
Corporate (1)							(118)
Consolidated operating earnings							$	549


	Six Months Ended December 31, 2025
(in millions)	Pharma		GMPD		Other		Total
Segment revenue	$	119,874	$	6,443	$	3,365	$	129,682

Cost of product sold	117,100		5,353		2,512		124,965
SG&A	1,420		1,007		508		2,935
Total segment expenses	118,520		6,360		3,020		127,900

Segment profit	$	1,354	$	83	$	345	$	1,782
Corporate (1)							(407)
Consolidated operating earnings							$	1,375


	Six Months Ended December 31, 2024
(in millions)	Pharma		GMPD		Other		Total
Segment revenue	$	98,839	$	6,277	$	2,469	$	107,585

Cost of product sold	96,659		5,228		1,853		103,740
SG&A	1,119		1,023		394		2,536
Total segment expenses	97,778		6,251		2,247		106,276

Segment profit	$	1,061	$	26	$	222	$	1,309
Corporate (1)							(192)
Consolidated operating earnings							$	1,117

(1)Corporate consists of the elimination of inter-segment revenue and other revenue and expenses not allocated to the segments.

Segment Assets

The following table presents total assets for the two reportable segments and the remaining operating segments, included in Other, and Corporate:

(in millions)	~~September~~December 3031, 2025		June 30, 2025
Pharmaceutical and Specialty Solutions	$	3843,~~683~~405	$	37,313
Global Medical Products and Distribution	76,~~133~~993		6,889
Other	4,~~049~~073		4,045
Corporate	53,~~363~~612		4,875
Total assets	$	5558,~~228~~083	$	53,122

The following tables present depreciation and amortization ~~and additions to property and equipment~~ for the two reportable segments and the remaining operating segments, included in Other, and Corporate:

	Three Months Ended September 30,
	Three Months Ended December 31,
(in millions)	2025		2024
Pharmaceutical and Specialty Solutions	$	6164	$	2746
Global Medical Products and Distribution	55		4960
Other	2930		1840
Corporate	8885		8846
Total depreciation and amortization	$	~~233~~234	$	~~182~~192

	Three Months Ended September 30,
	Six Months Ended December 31,
(in millions)	2025		2024
Pharmaceutical and Specialty Solutions	$	32125	$	1173
Global Medical Products and Distribution	19110		23109
Other	1559		1258
Corporate	42173		44134
Total additions to property and equipment	$	108	$	90
Total depreciation and amortization	$	467	$	374



36			Cardinal Health \| Q2 Fiscal 2026 Form 10-Q


Notes to Financial Statements

The following tables present additions to property and equipment for the two reportable segments and the remaining operating segments, included in Other, and Corporate:


	Three Months Ended December 31,
(in millions)	2025		2024
Pharmaceutical and Specialty Solutions	$	23	$	12
Global Medical Products and Distribution	23		21
Other	23		22
Corporate	62		44
Total additions to property and equipment	$	131	$	99


	Six Months Ended December 31,
(in millions)	2025		2024
Pharmaceutical and Specialty Solutions	$	55	$	23
Global Medical Products and Distribution	42		44
Other	38		34
Corporate	104		88
Total additions to property and equipment	$	239	$	189

The following table presents property and equipment, net by geographic area:

(in millions)	~~September~~December 3031, 2025		June 30, 2025
United States	$	2,~~396~~445	$	2,422
International	~~435~~432		436
Total property and equipment, net	$	2,~~831~~877	$	2,858

13. Share-Based Compensation

We maintain Cardinal Health, Inc. corporate stock incentive plans (collectively, the “Plans”) for the benefit of certain of our officers, directors, and employees. As of ~~September 30~~December 31, 2025, we have 1516 million shares authorized for issuance under the Plans. Upon vesting these units convert to common shares without restrictions or future service requirements.

~~Cardinal~~The ~~Health~~following |tables Q1provide ~~Fiscal~~total ~~2026~~share-based ~~Form~~compensation ~~10-Q~~expense 35by type of award:

Notes to Financial Statements


	Three Months Ended December 31,
(in millions)	2025		2024
Restricted share unit expense	$	16	$	18

Performance share unit expense	15		12
Total share-based compensation	$	31	$	30

The following table provides total share-based compensation expense by type of award:


	Six Months Ended December 31,
(in millions)	2025		2024
Restricted share unit expense	$	34	$	37

Performance share unit expense	27		23
Total share-based compensation	$	61	$	60

	Three Months Ended September 30,
(in millions)	2025		2024
Restricted share unit expense	$	18	$	19
Performance share unit expense	12		11
Total share-based compensation	$	30	$	30

The total tax benefit related to share-based compensation was $4 million for both the three months ended December 31, 2025

~~The~~and ~~total~~2024, ~~tax~~respectively, ~~benefit~~and ~~related to share-based compensation was~~ $4 7 million and for both the ~~three~~six months ended ~~September~~December 3031, 2025 and 2024, respectively. Share-based compensation expense is included in selling, general, and administrative expenses in the condensed consolidated statements of earnings. Our condensed consolidated statements of cash flows present our share-based compensation expense as a reconciling adjustment between net income and net cash provided by operating activities for all periods presented.

Restricted Share Units

Restricted share units granted under the Plans generally vest in equal annual installments over three years. Restricted share units accrue cash dividend equivalents that are payable upon vesting of the awards.

The following table summarizes all transactions related to restricted share units under the Plans:

(in millions, except per share amounts)	Restricted Share Units	Weighted-AverageGrant Date FairValue per Share
Nonvested at June 30, 2025	1.4	$	86.30
Granted	0.54	~~149~~151.6337
Vested	(0.7)	8889.5123
Canceled and forfeited	—	—121.81
Nonvested at September 30, 2025	1.2	$	119.11
Nonvested at December 31, 2025	1.1	$	110.11

The total fair value of units vested during both the three months ended ~~September~~December 3031, 2025 and 2024 were $533 million. The total fair value of units vested during both the six months ended December 31, 2025 and 2024 were $56 million.

At ~~September 30~~December 31, 2025, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted share units not yet recognized was $~~110~~98 million, which is expected to be recognized over a weighted-average period of two years.

Performance Share Units

Performance share units vest over a three-year performance period based on achievement of specific performance goals. Based on the extent to which the targets are achieved and our total shareholder return relative to the S&P 500 Health Care Index, vested shares may range from zero to 240 percent of the target award amount. Performance share units accrue cash dividend equivalents that are payable upon vesting of the awards.

~~The~~37 ~~following~~Cardinal ~~table~~Health ~~summarizes~~| ~~all~~Q2 ~~transactions~~Fiscal ~~related~~2026 toForm ~~performance share units under the Plans (based on target award amounts):~~10-Q

(in millions, except per share amounts)	PerformanceShare Units	Weighted-AverageGrant Date FairValue per Share
Nonvested at June 30, 2025	1.5	$	99.45
Granted	0.3	153.66
Vested	(0.6)	92.71
Canceled and forfeited	—	—
Nonvested at September 30, 2025	1.2	$	115.79

The total fair value of units vested during the three months ended September 30, 2025 and 2024 were $108 million and $45 million, respectively.

At September 30, 2025, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $59 million, which is expected to be recognized over a weighted-average period of two years if the performance goals are achieved.

Specialty Alliance Share-Based Compensation

Specialty Alliance, a majority-owned subsidiary of Cardinal Health, maintains standalone share-based compensation plans. Share-based compensation expense associated with these awards of $63 million was recognized during the three months ended September 30, 2025, of which $61 million is included in acquisition-related cash and share-based compensation costs and $2 million is included in selling, general, and administrative expenses in the condensed consolidated statements of earnings. The liability and associated future expenses may vary based on the changes in the estimated fair value.

The following table summarizes the fair market value of the Specialty Alliance Units as of September 30, 2025:

(in millions, except per share amounts)	Specialty Alliance Share Units	Fair Valueper Share
Nonvested at June 30, 2025	206	$	1.54
Granted	28	1.54
Vested	(35)	1.54
Canceled and forfeited	(1)	1.54
Nonvested at September 30, 2025	199	$	1.56
Vested at September 30, 2025	585	$	1.56

The total fair value of the Specialty Alliance Units vested during the three months ended September 30, 2025 was $53 million. During the three months ended September 30, 2025, we recognized an increase in the fair value of the liability, resulting in expense of $10 million, related to the vested Specialty Alliance Units, which is recognized in acquisition-related cash and share-based compensation costs.

At September 30, 2025, the total pre-tax compensation cost related to nonvested Specialty Alliance Units not yet recognized

36 Cardinal Health | Q1 Fiscal 2026 Form 10-Q


Notes to Financial Statements

~~was~~The ~~$310 million,~~following ~~which~~table issummarizes ~~expected~~all transactions related to beperformance ~~recognized~~share ~~over~~units aunder ~~weighted-average~~the ~~period~~Plans of(based ~~approximately~~on ~~one~~target ~~year.~~award amounts):

Cardinal Health | Q1 Fiscal 2026 Form 10-Q 37


(in millions, except per share amounts)	Performance Share Units	Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2025	1.5	$	99.45
Granted	0.5	153.66
Vested	(0.7)	92.71
Canceled and forfeited	—	—
Nonvested at December 31, 2025	1.3	$	117.36

No performance share units vested during the three months ended December 31, 2025 and 2024. The total fair value of units vested during the six months ended December 31, 2025 and 2024 were $108 million and $49 million, respectively.

At December 31, 2025, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $63 million, which is expected to be recognized over a weighted-average period of two years if the performance goals are achieved.

The Specialty Alliance Share-Based Compensation

The Specialty Alliance, a majority-owned subsidiary of Cardinal Health, maintains standalone share-based compensation plans. Share-based compensation expense associated with these awards of $56 million and $119 million was recognized during the three and six months ended December 31, 2025 respectively. Of the expense recognized for the three and six months ended December 31, 2025, $54 million and $115 million is included in acquisition-related cash and share-based compensation costs and $2 million and $4 million is included in selling, general, and administrative expenses in the condensed consolidated statements of earnings, respectively. The liability and associated future expenses may vary based on the changes in the estimated fair value.

The following table summarizes the fair market value of The Specialty Alliance Units as of December 31, 2025:


(in millions, except per share amounts)	The Specialty Alliance Share Units	Fair Value per Share
Nonvested at June 30, 2025	206	$	1.54
Granted	217	1.54
Vested	(77)	1.54
Canceled and forfeited	(1)	1.54
Nonvested at December 31, 2025	345	$	1.54
Vested at December 31, 2025	760	$	1.54

The total fair value of The Specialty Alliance Units vested during the three and six months ended December 31, 2025 was $66 million and $119 million, respectively. During the three months ended December 31, 2025, we recognized a decrease in the fair value of the liability, resulting in income of $10 million related to the vested Specialty Alliance Units, which is recognized in acquisition-

related cash and share-based compensation costs. There was no change in the fair value of the liability during the six months ended December 31, 2025.

At December 31, 2025, the total pre-tax compensation cost related to nonvested Specialty Alliance Units not yet recognized was $531 million, which is expected to be recognized over a weighted-average period of approximately three years.



38			Cardinal Health \| Q2 Fiscal 2026 Form 10-Q


Exhibits

Exhibits

ExhibitNumber			Exhibit Description
3.1			Amended and Restated Articles of Incorporation of Cardinal Health, Inc., as amended (incorporated by reference to Exhibit 3.1 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, File No. 1-11373)
3.2			Cardinal Health, Inc. Restated Code of Regulations (incorporated by reference to Exhibit 3.1 to Cardinal Health's Current Report on Form 8-K filed on May 11, 2023, File No. 1-11373)
4.1			Third Supplemental Indenture, dated as of August 27, 2025, between Cardinal Health, Inc., as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.2 to Cardinal Health, Inc.'s Current Report on Form 8-K filed on August 27, 2025, File No. 1-11373)
10.1			364-Day Credit Agreement, dated October 7, 2025 (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Current Report on Form 8-K filed on October 10, 2025, File No. 1-11373)
4.2			Form of 4.500% Notes due 2030 (included in Exhibit 4.1)
10.2			Third Amendment to the Cardinal Health Deferred Compensation Plan, as amended and restated on January 1, 2020
4.3			Form of 5.150% Notes due 2035 (included in Exhibit 4.1)
10.3			Aircraft Time Sharing Agreement, dated as of November 18th, 2025, by and between Cardinal Health, Inc. and Jason M. Hollar
10.1			First Amendment, dated September 30, 2025, to the Fifth Amended and Restated Receivables Purchase Agreement (incorporated by reference to Exhibit 10.1 to Cardinal Health's Current Report on Form 8-K filed on October 3, 2025, File No. 1-11373)
10.2			364-Day Credit Agreement, dated October 7, 2025 (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Current Report on Form 8-K filed on October 10, 2025, File No. 1-11373)
31.1			Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2			Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1			Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1			Statement Regarding Forward-Looking Information
101.SCH			Inline XBRL Taxonomy Extension Schema Document
101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF			Inline XBRL Taxonomy Definition Linkbase Document
101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document
104			Cover Page Interactive Data File - formatted in Inline XBRL (included as Exhibit 101)

Cardinal Health Website

Cardinal Health uses its website as a channel of distribution for material company information. Important information, including news releases, financial information, earnings and analyst presentations, and information about upcoming presentations and events is routinely posted and accessible at ir.cardinalhealth.com. In addition, the website allows investors and other interested persons to sign up automatically to receive e-mail alerts when we post news releases, SEC filings, and certain other information on its website.

3839 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q


Form 10-Q Cross Reference Index

Form 10-Q Cross Reference Index

Item Number		Page
	Part I. Financial Information
Item 1	Financial Statements	1918
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	2
Item 3	Quantitative and Qualitative Disclosures about Market Risk	16
Item 4	Controls and Procedures	16
	Part II. Other Information
Item 1	Legal Proceedings	17
Item 1A	Risk Factors	17
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	1817
Item 3	Defaults Upon Senior Securities	N/A
Item 4	Mine Safety Disclosures	N/A
Item 5	Other Information	1817
Item 6	Exhibits	3839
	Signatures	4041


N/A			Not applicable

40 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q 39


Additional Information

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.

		Cardinal Health, Inc.
Date:	~~October~~February 305, ~~2025~~2026	/s/ JASON M. HOLLAR
		Jason M. Hollar
		Chief Executive Officer
		/s/ AARON E. ALT
Date:	February 5, 2026	/s/ AARON E. ALT
		Aaron E. Alt
		Chief Financial Officer

4041 Cardinal Health | Q1Q2 Fiscal 2026 Form 10-Q

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