Cardinal Health Sees Growth Normalize as Specialty, At-Home Investments Expand

Cardinal Health expects growth to normalize in fiscal 2027 after fiscal 2026 benefited from unusually strong specialty growth, customer onboarding, acquisitions and solid healthcare utilization. Management said all five operating segments delivered double-digit earnings growth in fiscal 2026. The company is expanding its specialty and at-home healthcare strategy through MSO platforms, bolt-on acquisitions and diabetes-related deals. Strive Medical has closed, while the AdaptHealth diabetes acquisition is expected to close in the second half of fiscal 2027, strengthening Cardinal’s continuous glucose monitoring business. Cardinal is prioritizing automated, small-parcel distribution of higher-value at-home products and plans to add three more automated distribution centers. Management also said cash flow was strong in fiscal 2026, putting the company about 90% of the way toward its previously announced $10 billion objective.

Cardinal Health CEO Jason Hollar said the company’s fiscal 2026 performance was supported by double-digit earnings growth across each of its five operating segments, while fiscal 2027 guidance reflects continued growth from a more normalized base. Speaking at a Baird event, Hollar said the company’s results were not driven by a single factor. Strong healthcare utilization, specialty growth, new customer wins, acquisitions and operational execution all contributed, he said. However, Cardinal expects certain drivers of the prior year’s outperformance—including unusually strong specialty growth and customer onboarding—to be less pronounced in fiscal 2027.

Hollar said Cardinal’s specialty business grew 25% during fiscal 2026, aided by acquisitions, customer gains and service provided to existing customers. He said the company expects growth to moderate from that level as the effects of acquisitions and new customer wins are annualized, though underlying demand remains constructive.

Cardinal is continuing to invest in specialty and at-home healthcare businesses. Hollar said the company has three managed-services organization platforms focused on oncology, urology and gastroenterology. The company is now focused on integrating those platforms while continuing to pursue bolt-on acquisitions; it completed four such acquisitions during the most recent quarter, he said. Hollar said Cardinal does not currently manage its business in a way that would support separate segment reporting for MSO operations. The company views the operations as part of its larger specialty strategy, where distribution, biopharma services and physician-focused offerings are interconnected.

On recent at-home deals, Hollar said Strive Medical has already closed and provides urology-focused durable medical equipment. He described the acquisition as a fit with Cardinal’s existing urology distribution, MSO, nuclear pharmaceutical and at-home operations. The acquisition of AdaptHealth’s diabetes business is expected to close in the second half of fiscal 2027, according to Hollar. He said the business complements Cardinal’s Advanced Diabetes Supply, or ADS, acquisition and expands the company’s presence in c...