Cencora Inc.
02/04/2026 | Press release | Distributed by Public on 02/04/2026 13:44
Quarterly Report for Quarter Ending December 31, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
In reviewing this Management's Discussion and Analysis of Financial Condition and Results of Operations, please note that we face many uncertainties and risks related to various economic, political and regulatory environments in which we operate, both within the U.S. and internationally. Refer to the headings "Item 1A. Risk Factors" in Part I of our Annual Report on Form 10-K for the year ended September 30, 2025, as well as the heading "Cautionary Note Regarding Forward-Looking Statements" above for additional information related to our present business environment.
Recent Developments
New Reporting Structure
We undertook a strategic review of our business to ensure alignment with our growth priorities and strategic drivers. As a result of this review, beginning in the first quarter of fiscal 2026, we reorganized certain business components within our reporting structure. Our revised reporting structure is comprised of U.S. Healthcare Solutions, International Healthcare Solutions, and Other. The U.S. Healthcare Solutions reportable segment consists of U.S. Human Health (excluding legacy U.S. Consulting Services). The International Healthcare Solutions reportable segment consists of Alliance Healthcare, Innomar, World Courier, and strategic components of PharmaLex. Other, which is not considered a reportable segment, consists of businesses for which the Company has begun to explore strategic alternatives and includes MWI Animal Health, Profarma, U.S. Consulting Services, and the other components of PharmaLex. Our previously reported segment results have been revised to conform to our re-aligned reporting structure.
Acquisition
On February 2, 2026, we acquired the majority of the outstanding equity interests that we did not previously own in OneOncology, a physician-led national platform empowering independent medical specialty practices rooted in oncology for a total cash consideration of approximately $4.6 billion. OneOncology's affiliated practices and management retained a minority interest in OneOncology. We funded the transaction through new debt financing (see Note 6 of the Consolidated Notes to Financial Statements). OneOncology's future operating results will be consolidated as a component of the U.S. Healthcare Solutions reportable segment.
Executive Summary
This executive summary provides highlights from the results of operations that follow:
•Revenue increased by $4.4 billion, or 5.5%, from the prior year quarter primarily due to growth in both reportable segments. U.S. Healthcare Solutions' revenue increased by $3.7 billion, or 5.0%, from the prior year quarter primarily due to overall market growth largely driven by unit volume growth, including increased sales of specialty products to health systems and physician practices and products labeled for diabetes and/or weight loss in the GLP-1 class of $1.0 billion, or 10.9%, offset in part by a decrease in sales due to losses of a grocery customer and an oncology customer. International Healthcare Solutions' revenue increased by $0.7 billion, or 9.6%, from the prior year quarter primarily due to increased sales at our European distribution business of $0.5 billion from the prior year quarter.
•Gross profit increased by $514.0 million, or 20.1%, from the prior year quarter primarily due to the increase in gross profit in both reportable segments and a $70.2 million increase in the LIFO credit. U.S. Healthcare Solutions' gross profit increased by $428.8 million, or 29.5%, from the prior year quarter primarily due to the January 2025 acquisition of RCA and increased sales. International Healthcare Solutions' gross profit increased $25.2 million, or 3.3%, from the prior year quarter primarily due to increases in gross profit at our global specialty logistics business and our European distribution business.
•Total operating expenses increased by $459.8 million, or 24.8%, from the prior year quarter primarily due to the January 2025 acquisition of RCA and an impairment of assets of our U.S. Consulting Services business that is held for sale.
•Total segment operating income increased by $113.4 million, or 11.9%, from the prior year quarter. U.S. Healthcare Solutions' operating income increased by $144.4 million, or 21.0%, from the prior year quarter due to the January 2025 acquisition of RCA and overall growth. International Healthcare Solutions' operating income decreased by $23.0 million, or 13.9%, from the prior year quarter.
•Our effective tax rates were 20.1% and 20.4% for the three months ended December 31, 2025 and 2024, respectively. The effective tax rates for the three months ended December 31, 2025 and 2024 were lower than the U.S. statutory rate primarily due to the benefit of income taxed at rates lower than the U.S. statutory rate and tax benefits associated with equity compensation, offset in part by U.S. state income taxes.
Results of Operations
Revenue
|
Three months ended December 31, |
||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | Change | |||||||||||||||||
| U.S. Healthcare Solutions | $ | 76,211,825 | $ | 72,555,294 | 5.0% | |||||||||||||||
| International Healthcare Solutions: | ||||||||||||||||||||
| Alliance Healthcare | 6,530,697 | 5,999,200 | 8.9% | |||||||||||||||||
| Other Healthcare Solutions | 1,093,276 | 959,695 | 13.9% | |||||||||||||||||
| Total International Healthcare Solutions | 7,623,973 | 6,958,895 | 9.6% | |||||||||||||||||
| Other: | ||||||||||||||||||||
| Animal Health | 1,471,317 | 1,379,985 | 6.6% | |||||||||||||||||
| Other non-strategic businesses | 657,630 | 622,470 | 5.6% | |||||||||||||||||
| Total Other | 2,128,947 | 2,002,455 | 6.3% | |||||||||||||||||
| Intersegment eliminations | (32,729) | (29,584) | ||||||||||||||||||
| Revenue | $ | 85,932,016 | $ | 81,487,060 | 5.5% | |||||||||||||||
Our future revenue growth will continue to be affected by various factors, such as industry growth trends, including drug utilization (e.g., products labeled for diabetes and/or weight loss in the GLP-1 class), the introduction of new, innovative brand therapies and vaccines, the likely increase in the number of generic drugs and biosimilars that will be available over the next few years as a result of the expiration of certain drug patents held by brand-name pharmaceutical manufacturers and the rate of conversion from brand products to those generic drugs and biosimilars, price inflation and price deflation, general economic conditions in the United States and Europe, currency exchange rates, competition within the industry, customer consolidation, changes in pharmaceutical manufacturer pricing and distribution policies and practices, increased downward pressure on government and other third-party reimbursement rates to our customers, and changes in government rules and regulations.
Revenue increased by $4.4 billion, or 5.5%, from the prior year quarter primarily due to growth in both reportable segments.
U.S. Healthcare Solutions' revenue increased by $3.7 billion, or 5.0%, from the prior year quarter primarily due to overall market growth largely driven by unit volume growth, including increased sales of specialty products to health systems and physician practices and products labeled for diabetes and/or weight loss in the GLP-1 class of $1.0 billion, or 10.9%, offset in part by a decrease in sales due to losses of a grocery customer and an oncology customer.
International Healthcare Solutions' revenue increased by $0.7 billion, or 9.6%, from the prior year quarter primarily due to increased sales at our European distribution business of $0.5 billion from the prior year quarter.
Revenue in Other increased by $0.1 billion, or 6.3%, from the prior year quarter due to increased sales at our animal health business and our less-than-wholly-owned Brazil distribution business, offset in part by a decrease in sales at our consulting services businesses.
A number of our contracts with customers, including group purchasing organizations, are typically subject to expiration each year. We may lose a key customer if an existing contract with such customer expires without being extended, renewed, or replaced. Over the next twelve months, there are no key contracts scheduled to expire. Additionally, from time to time, key contracts may be terminated in accordance with their terms or extended, renewed, or replaced prior to their expiration dates. If those contracts are extended, renewed, or replaced at less favorable terms, they may also negatively impact our revenue, results of operations, and cash flows.
Gross Profit
|
Three months ended December 31, |
||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | Change | |||||||||||||||||
| U.S. Healthcare Solutions | $ | 1,883,563 | $ | 1,454,809 | 29.5% | |||||||||||||||
| International Healthcare Solutions | 789,422 | 764,242 | 3.3% | |||||||||||||||||
| Other | 324,481 | 317,672 | 2.1% | |||||||||||||||||
| Intersegment eliminations | (4,220) | (1,724) | ||||||||||||||||||
| Gains from antitrust litigation settlements | 12,152 | 22,870 | ||||||||||||||||||
| LIFO credit | 77,562 | 7,324 | ||||||||||||||||||
|
Türkiye highly inflationary impact
|
(10,889) | (7,155) | ||||||||||||||||||
| Gross profit | $ | 3,072,071 | $ | 2,558,038 | 20.1% | |||||||||||||||
Gross profit increased by $514.0 million, or 20.1%, from the prior year quarter primarily due to the increase in gross profit in both reportable segments and a $70.2 million increase in the LIFO credit.
U.S. Healthcare Solutions' gross profit increased by $428.8 million, or 29.5%, from the prior year quarter primarily due to the January 2025 acquisition of RCA and increased sales. As a percentage of revenue, U.S. Healthcare Solutions' gross profit margin of 2.47% in the current year quarter increased 46 basis points from the prior year quarter primarily due to the January 2025 acquisition of RCA, offset in part by higher sales of GLP-1 products, which have lower gross profit margins.
International Healthcare Solutions' gross profit increased $25.2 million, or 3.3%, from the prior year quarter primarily due to increases in gross profit at our global specialty logistics business and our European distribution business.
Gross profit in Other increased by $6.8 million, or 2.1%, from the prior year quarter.
We recognized gains from antitrust litigation settlements with pharmaceutical manufacturers of $12.2 million and $22.9 million in the three months ended December 31, 2025 and 2024, respectively. The gains were recorded as reductions to Cost of Goods Sold (see Note 10 of the Notes to Consolidated Financial Statements).
Our cost of goods sold for interim periods includes a LIFO provision that is recorded ratably on a quarterly basis and is based on our estimated annual LIFO provision. The annual LIFO provision, which we estimate on a quarterly basis, is affected by manufacturer pricing practices, which may be impacted by market and other external influences, expected changes in inventory quantities, and product mix, many of which are difficult to predict. Changes to any of the above factors may have a material impact on our annual LIFO provision. Based on estimates in our current fiscal year LIFO provision, the increase in the LIFO credit in the current year quarter is primarily due to a decline in manufacturer prices related to certain brand pharmaceutical products.
We recognized expense in Cost of Goods Sold of $10.9 million and $7.2 million in the three months ended December 31, 2025 and 2024, respectively, related to the impact of Türkiye highly inflationary accounting driven by the continued weakening of the Turkish Lira.
Operating Expenses
|
Three months ended December 31, |
||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | Change | |||||||||||||||||
| Distribution, selling, and administrative | $ | 1,795,289 | $ | 1,472,055 | 22.0% | |||||||||||||||
| Depreciation and amortization | 260,401 | 278,492 | (6.5)% | |||||||||||||||||
| Litigation and opioid-related (credit) expenses, net | (86,151) | 16,765 | ||||||||||||||||||
| Acquisition-related deal and integration expenses | 78,419 | 38,712 | ||||||||||||||||||
| Restructuring and other expenses, net | 14,166 | 45,760 | ||||||||||||||||||
| Impairment of assets, including goodwill | 249,498 | - | ||||||||||||||||||
| Total operating expenses | $ | 2,311,622 | $ | 1,851,784 | 24.8% | |||||||||||||||
Distribution, selling, and administrative expenses increased by $323.2 million, or 22.0%, compared to the prior year quarter primarily due to the January 2025 acquisition of RCA and to support our revenue growth. As a percentage of revenue,
distribution, selling, and administrative expenses were 2.09% in the current year quarter and represents an increase of 28 basis points compared to the prior year quarter primarily due to the acquisition of RCA.
Depreciation expense increased 19.1% from the prior year quarter. Amortization expense decreased 23.9% from the prior year quarter due to certain tradenames becoming fully amortized in connection with our company name change to Cencora and the gradual transition away from other tradenames used, which were acquired through prior acquisitions.
Litigation and opioid-related (credit) expenses, net in the three months ended December 31, 2025 and 2024 include legal fees in connection with opioid lawsuits and investigations. Litigation and opioid-related (credit) expenses, net in the three months ended December 31, 2025 also includes an $86.8 million credit related to a derivative lawsuit settlement (see Note 9 of the Consolidated Notes to Financial Statements).
Acquisition-related deal and integration expenses in the three months ended December 31, 2025 included expenses related to our acquisitions of RCA and OneOncology, costs associated with strategic alternatives of certain non-core businesses, and the continued integration of PharmaLex. Acquisition-related deal and integration expenses in the three months ended December 31, 2024 primarily included costs related to the acquisition of RCA and the integration of PharmaLex.
Restructuring and other expenses, net are comprised of the following:
|
Three months ended December 31, |
||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| Restructuring and employee severance costs, net | $ | 3,678 | $ | 19,555 | ||||||||||
| Business transformation efforts | 10,126 | 25,074 | ||||||||||||
| Other, net | 362 | 1,131 | ||||||||||||
| Total restructuring and other expenses, net | $ | 14,166 | $ | 45,760 | ||||||||||
Restructuring and employee severance costs, net in the three months ended December 31, 2025 primarily included costs associated with workforce reductions, offset in part by a gain on the sale of a facility. Restructuring and employee severance costs, net in the three months ended December 31, 2024 primarily included costs associated with workforce reductions.
Business transformation efforts in the three months ended December 31, 2025 and 2024 included non-recurring expenses related to significant strategic initiatives to improve operational efficiency, including certain technology initiatives. Business transformation efforts in the three months ended December 31, 2024 also included rebranding costs associated with our name change to Cencora. The majority of these costs are related to services provided by third-party consultants.
We recorded an impairment of assets of $249.5 million, including goodwill, related to our U.S. Consulting Services business that was classified as held for sale as of December 31, 2025.
Operating Income
|
Three months ended December 31, |
||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | Change | |||||||||||||||||
| U.S. Healthcare Solutions | $ | 831,330 | $ | 686,925 | 21.0% | |||||||||||||||
| International Healthcare Solutions | 142,156 | 165,180 | (13.9)% | |||||||||||||||||
| Other | 91,417 | 97,329 | (6.1)% | |||||||||||||||||
| Intersegment eliminations | (2,189) | (126) | ||||||||||||||||||
| Total segment operating income | 1,062,714 | 949,308 | 11.9% | |||||||||||||||||
| Gains from antitrust litigation settlements | 12,152 | 22,870 | ||||||||||||||||||
| LIFO credit | 77,562 | 7,324 | ||||||||||||||||||
|
Türkiye highly inflationary impact
|
(10,889) | (7,155) | ||||||||||||||||||
| Acquisition-related intangibles amortization | (125,158) | (164,856) | ||||||||||||||||||
| Litigation and opioid-related credit (expenses), net | 86,151 | (16,765) | ||||||||||||||||||
| Acquisition-related deal and integration expenses | (78,419) | (38,712) | ||||||||||||||||||
| Restructuring and other expenses, net | (14,166) | (45,760) | ||||||||||||||||||
| Impairment of assets, including goodwill | (249,498) | - | ||||||||||||||||||
| Operating income | $ | 760,449 | $ | 706,254 | 7.7% | |||||||||||||||
U.S. Healthcare Solutions' operating income increased by $144.4 million, or 21.0%, from the prior year quarter primarily due to the increase in gross profit, as noted above, and was offset in part by the increase in operating expenses. As a percentage of revenue, U.S. Healthcare Solutions' operating income margin was 1.09% in the current year quarter and represents an increase of 14 basis points from the prior year quarter due to the increase gross profit margin, as described above in the Gross Profit section, offset in part by increase in the operating expense margin.
International Healthcare Solutions' operating income decreased by $23.0 million, or 13.9%, from the prior year quarter primarily due to lower operating income at our European distribution business, offset in part by an increase in operating income at our global specialty logistics business.
Operating income in Other decreased by $5.9 million, or 6.1%, from the prior year quarter primarily due to lower operating income at our consulting services businesses, offset in part by an increase in operating income at our animal health business.
Other (Income) Loss, Net
Other (income) loss, net in the three months ended December 31, 2025 includes a $14.4 million gain on the foreign currency remeasurement of Swiss deferred tax assets arising from 2020 Swiss tax reform and a $10.5 million gain on the remeasurement of an equity investment. Other (income) loss, net in the three months ended December 31, 2024 includes a $35.5 million loss on the divestiture of non-core businesses and a $15.2 million loss on the foreign currency remeasurement of Swiss deferred tax assets arising from 2020 Swiss tax reform.
Interest Expense, Net
| Three months ended December 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
| (dollars in thousands) | Amount |
Weighted Average Interest Rate |
Amount |
Weighted Average Interest Rate |
||||||||||||||||||||||
| Interest expense | $ | 93,363 | 4.00% | $ | 61,181 | 3.90% | ||||||||||||||||||||
| Interest income | (20,954) | 3.56% | (33,248) | 5.44% | ||||||||||||||||||||||
| Interest expense, net | $ | 72,409 | $ | 27,933 | ||||||||||||||||||||||
Interest expense, net increased by $44.5 million, or 159.2%, from the prior year quarter due to the increase in interest expense and a decrease in interest income. The increase in interest expense was primarily due to the issuance of our $1.8 billion of senior notes in December 2024 and the $0.8 billion balance remaining on the variable-rate term loan, which we borrowed in January 2025 to finance a portion of the RCA acquisition, and the issuance of our €1.0 billion of senior notes in May 2025, offset in part by the repayment of our $500 million of senior notes that matured in March 2025. The decrease in interest income was primarily driven by lower investment interest rates in the current year quarter in comparison to the prior year quarter.
Income Tax Expense
Our effective tax rates were 20.1% and 20.4% for the three months ended December 31, 2025 and 2024, respectively. The effective tax rates for the three months ended December 31, 2025 and 2024 were lower than the U.S. statutory rate primarily due to the benefit of income taxed at rates lower than the U.S. statutory rate and tax benefits associated with equity compensation, offset in part by U.S. state income taxes.
Liquidity and Capital Resources
Our operating results have generated cash flows, which, together with availability under our debt agreements and credit terms from suppliers, have provided sufficient capital resources to finance working capital and cash operating requirements, and to fund capital expenditures, acquisitions, repayment of debt, the payment of interest on outstanding debt, dividends, and purchases of shares of our common stock.
Our primary ongoing cash requirements will be to finance working capital, fund the repayment of debt, fund the payment of interest on debt, fund the payment of dividends, fund purchases of our common stock, finance acquisitions, and fund capital expenditures and routine growth and expansion through new business opportunities. Future cash flows from operations and borrowings are expected to be sufficient to fund our ongoing cash requirements, including the opioid litigation payments that will be made over the next 13 years (see below).
As of December 31, 2025 and September 30, 2025, our cash and cash equivalents held by foreign subsidiaries were $864.6 million and $957.7 million, respectively. We have the ability to repatriate the majority of our cash and cash equivalents held by our foreign subsidiaries without incurring significant additional taxes upon repatriation.
Our cash balances in the three months ended December 31, 2025 and 2024 were supplemented by intra-period credit facility borrowings to cover short-term working capital needs. The largest amount of intra-period borrowings that was outstanding at any one time under our revolving and securitization credit facilities during the three months ended December 31, 2025 and 2024 was $1.6 billion and $2.1 billion, respectively. We had $23.5 billion and $13.4 billion of cumulative intra-period borrowings that were repaid under our credit facilities during the three months ended December 31, 2025 and 2024, respectively.
Cash Flows
We used $2.3 billion of cash in operations during the three months ended December 31, 2025 compared to $2.7 billion of cash used in operations during the three months ended December 31, 2024, a decrease of $0.4 billion. The timing of cash receipts and disbursements and inventory purchases can significantly impact our working capital. In the three months ended December 31, 2025, the growth of our accounts receivable, inventories, and accounts payable resulted in $3.0 billion of cash used in operations compared to $3.3 billion of cash used in the three months ended December 31, 2024.
During the three months ended December 31, 2025, our operating activities used cash of $2.3 billion and was principally the result of the following:
•An increase in inventories of $3.5 billion to support the increase in business volume and due to seasonal needs;
•An increase in accounts receivable of $0.8 billion primarily due to an increase in sales and the timing of scheduled payments from our customers; and
•A decrease in accrued expenses of $0.3 billion primarily due to the payment of accrued liabilities that were on our Consolidated Balance Sheet as of September 30, 2025.
The cash used in the above items was offset in part by the following:
•An increase in accounts payable of $1.3 billion due to the increase in our inventory balances and the timing of scheduled payments to our suppliers;
•Net income of $0.6 billion; and
•Positive non-cash items of $0.5 billion, which is primarily comprised of a $0.2 billion impairment of assets, including goodwill, depreciation expense of $0.1 billion, and amortization expense of $0.1 billion.
During the three months ended December 31, 2024, our operating activities used cash of $2.7 billion and was principally the result of the following:
•An increase in inventories of $1.7 billion to support the increase in business volume and due to seasonal needs;
•An increase in accounts receivable of $1.0 billion primarily due to an increase in sales and the timing of scheduled payments from our customers; and
•A decrease in accounts payable of $0.7 billion primarily due to the timing of scheduled payments to our suppliers.
The cash used in the above items was offset in part by the following:
•Net income of $0.5 billion; and
•Positive non-cash items of $0.4 billion, which is primarily comprised of amortization expense of $0.2 billion and depreciation expense of $0.1 billion.
We use days sales outstanding, days inventory on hand, and days payable outstanding to evaluate our working capital performance. The below financial metrics are calculated based upon a quarterly average and can be impacted by the timing of cash receipts and disbursements, which can vary significantly depending upon the day of the week on which the period ends.
|
Three months ended December 31, |
|||||||||||
| 2025 | 2024 | ||||||||||
| Days sales outstanding | 27.8 | 27.8 | |||||||||
| Days inventory on hand | 27.8 | 26.0 | |||||||||
| Days payable outstanding | 59.2 | 58.5 | |||||||||
Our cash flows from operating activities can vary significantly from period to period based upon fluctuations in our period-end working capital account balances. Any changes to payment terms with a key customer or manufacturer supplier could have a material impact to our cash flows from operations. The addition of any new key customer or the loss of an existing key customer could have a material impact on our cash flows from operations.
Operating cash flows during the three months ended December 31, 2025 included $87.9 million of interest payments and $30.9 million of income tax payments, net of refunds. Operating cash flows during the three months ended December 31, 2024 included $48.8 million of interest payments and $29.5 million of income tax payments, net of refunds.
Capital expenditures in the three months ended December 31, 2025 and 2024 were $119.4 million and $105.9 million, respectively. Significant capital expenditures in the three months ended December 31, 2025 and 2024 included investments relating to the continued expansion and enhancement of our distribution network and various technology initiatives.
We currently expect to invest approximately $900 million in capital expenditures during fiscal 2026. Larger 2026 capital expenditures will include investments relating to the continued expansion and enhancement of our distribution network and various technology initiatives.
In addition to capital expenditures, net cash used in investing activities in the three months ended December 31, 2025 included $0.2 billion for acquisitions. In addition to capital expenditures, net cash used in investing activities in the three months ended December 31, 2024 included $0.2 billion for equity investments.
Net cash provided by financing activities of $43.2 million in the three months ended December 31, 2025 principally resulted from the $0.3 billion of net borrowings under our revolving credit facilities to cover seasonal, short-term working capital needs, offset in part by $0.1 billion in cash dividends paid on our common stock and $0.1 billion in purchases of our common stock related to employee tax withholdings related to restricted share vesting.
Net cash provided by financing activities of $3.2 billion in the three months ended December 31, 2024 principally resulted from the $2.0 billion of net borrowings under our revolving credit facilities to cover seasonal, short-term working capital needs and the $1.8 billion issuance of senior notes to finance a portion of the acquisition of RCA, offset in part by $0.4 billion in purchases of our common stock and $0.1 billion in cash dividends paid on our common stock.
Debt and Credit Facility Availability
The following table illustrates our debt structure as of December 31, 2025, including availability under the multi-currency revolving credit facility, the receivables securitization facility, the money market facility, the working capital credit facility, and the Alliance Healthcare debt:
| (in thousands) |
Outstanding Balance |
Additional Availability |
||||||||||||
| Fixed-Rate Debt: | ||||||||||||||
| $750,000, 3.450% senior notes due 2027 | $ | 748,360 | $ | - | ||||||||||
| $500,000, 4.625% senior notes due 2027 | 497,615 | - | ||||||||||||
| €500,000, 2.875% senior notes due 2028 | 584,652 | - | ||||||||||||
| $600,000, 4.850% senior notes due 2029 | 596,804 | - | ||||||||||||
| $500,000, 2.800% senior notes due 2030 | 497,327 | - | ||||||||||||
| $1,000,000, 2.700% senior notes due 2031 | 994,118 | - | ||||||||||||
| €500,000, 3.625% senior notes due 2032 | 582,335 | - | ||||||||||||
| $500,000, 5.125% senior notes due 2034 | 495,251 | - | ||||||||||||
| $700,000, 5.150% senior notes due 2035 | 695,048 | |||||||||||||
| $500,000, 4.250% senior notes due 2045 | 495,846 | - | ||||||||||||
| $500,000, 4.300% senior notes due 2047 | 494,154 | - | ||||||||||||
| Nonrecourse debt | 52,181 | - | ||||||||||||
| Total fixed-rate debt | 6,733,691 | - | ||||||||||||
| Variable-Rate Debt: | ||||||||||||||
| Multi-currency revolving credit facility due in 2030 | 220,000 | 4,280,000 | ||||||||||||
| Receivables securitization facility due in 2028 | - | 1,500,000 | ||||||||||||
| Term loan due in 2027 | 799,177 | - | ||||||||||||
| Money market facility due in 2027 | - | 750,000 | ||||||||||||
| Working capital credit facility due in 2026 | - | 500,000 | ||||||||||||
| Alliance Healthcare debt | 70,507 | 655,665 | ||||||||||||
| Nonrecourse debt | 98,360 | - | ||||||||||||
| Total variable-rate debt | 1,188,044 | 7,685,665 | ||||||||||||
| Total debt | $ | 7,921,735 | $ | 7,685,665 | ||||||||||
We had a $4.5 billion multi-currency senior unsecured revolving credit facility ("Multi-Currency Revolving Credit Facility") with a syndicate of lenders. In January 2026, we amended and restated the Multi-Currency Revolving Credit Facility to increase the aggregate amount of the commitments under this facility to $5.5 billion. The Multi-Currency Revolving Credit Facility is scheduled to expire in June 2030. Interest on borrowings under the Multi-Currency Revolving Credit Facility accrues at specified rates based upon our debt rating. We pay facility fees to maintain the availability under the Multi-Currency Revolving Credit Facility at specified rates based on our debt rating. We may choose to repay or reduce our commitments under the Multi-Currency Revolving Credit Facility at any time. The Multi-Currency Revolving Credit Facility contains covenants, including compliance with a financial leverage ratio test, as well as others that impose limitations on, among other things, indebtedness of subsidiaries and asset sales, with which we were compliant as of December 31, 2025.
We have a $4.5 billion commercial paper program. The commercial paper program does not increase our borrowing capacity, and it is fully backed by our Multi-Currency Revolving Credit Facility. We may, from time to time, issue short-term promissory notes in an aggregate amount of up to $4.5 billion at any one time. Amounts available under the program may be borrowed, repaid, and re-borrowed from time to time. The maturities on the notes will vary but may not exceed 365 days from the date of issuance. The notes will bear interest, if interest bearing, or will be sold at a discount from their face amounts. There were $220.0 million of borrowings outstanding under the commercial paper program as of December 31, 2025 and none outstanding as of September 30, 2025.
We have a $1.5 billion receivables securitization facility ("Receivables Securitization Facility"), which is scheduled to expire in June 2028. The Receivables Securitization Facility has an accordion feature that allows us to increase the commitment on the Receivables Securitization Facility by up to $500 million, subject to lender approval. Interest rates are based on prevailing market rates for short-term commercial paper or 30-day Term SOFR, plus a program fee. We pay a customary unused fee at prevailing market rates, monthly, to maintain the availability under the Receivables Securitization Facility. The Receivables Securitization Facility contains similar covenants to the Multi-Currency Revolving Credit Facility, with which we were compliant as of December 31, 2025. There were no borrowings outstanding under the Receivables Securitization Facility as of December 31, 2025 and September 30, 2025.
In connection with the Receivables Securitization Facility, AmerisourceBergen Drug Corporation and a specialty distribution subsidiary sell on a revolving basis certain accounts receivable to Amerisource Receivables Financial Corporation, a wholly-owned special purpose entity, which in turn sells a percentage ownership interest in the receivables to financial institutions and commercial paper conduits sponsored by financial institutions. AmerisourceBergen Drug Corporation is the servicer of the accounts receivable under the Receivables Securitization Facility. As sold receivables are collected, additional receivables may be sold up to the maximum amount available under the facility. We use the facility as a financing vehicle because it generally offers an attractive interest rate relative to other financing sources. We securitize our trade accounts, which are generally non-interest bearing, in transactions that are accounted for as borrowings.
We have an uncommitted, unsecured line of credit available to us pursuant to a money market credit agreement (the "Money Market Facility") that allows us to request short-term unsecured revolving credit loans in a principal amount not to exceed $500 million on or after April 1 and before December 1 of any year and increases to $750 million on or after December 1 and before March 31 of any year. The Money Market Facility may be decreased or terminated by the bank or us at any time without prior notice. There were no borrowings outstanding under the Money Market Facility as of December 31, 2025 and September 30, 2025.
We have an uncommitted, unsecured line of credit to support our working capital needs ("Working Capital Credit Facility"). The Working Capital Credit Facility provides us with the ability to request short-term, unsecured revolving credit loans from time to time in a principal amount not to exceed $500 million. The Working Capital Credit Facility expires in July 2026 and may be decreased or terminated by the bank or us at any time without prior notice. There were no borrowings outstanding under the Working Capital Credit Facility as of December 31, 2025 and September 30, 2025.
In January 2026, we entered into an agreement pursuant to which we obtained a $1.5 billion delayed draw senior unsecured term loan facility ("Multi-Year Term Loan Facility") with a syndicate of lenders consisting of a $500 million tranche ("Tranche One") and a $1.0 billion tranche ("Tranche Two"). Tranche One and Tranche Two mature two years and three years, respectively, from February 2, 2026, the date on which it was drawn. The Multi-Year Term Loan Facility was used to finance a portion of the acquisition of OneOncology (see Note 13 of the Consolidated Notes to Financial Statements).
The Multi-Year Term Loan Facility will bear interest at a rate equal to either a Term SOFR rate or a Daily Simple SOFR rate, plus an applicable margin, or an alternate base rate, plus an applicable margin, in each case based on our public debt ratings. We have also agreed to pay a fee that will, commencing on April 1, 2026, accrue at specified rates based on our public debt ratings, on the daily amount of unused commitments under the Multi-Year Term Loan Facility. We have the right to prepay borrowings under the Multi-Year Term Loan Facility at any time, in whole or in part and without premium or penalty. We may also choose to reduce our commitments under the Multi-Year Term Credit Facility at any time.
In January 2026, we entered into an agreement pursuant to which we obtained a $3.0 billion delayed draw senior unsecured term loan facility (the "364-Day Term Loan Facility") with a syndicate of lenders, which matures 364 days from February 2, 2026, the date on which it was drawn. The 364-Day Term Loan Facility was used to finance a portion of the acquisition of OneOncology.
Interest on borrowings under the 364-Day Term Loan Facility will accrue at a rate equal to either a Term SOFR or a Daily Simple SOFR, plus an applicable margin or an alternate base rate plus an applicable margin, in each case based on our public debt ratings. We have also agreed to pay a fee that will, commencing on April 1, 2026, accrue at specified rates based on our public debt ratings, on the daily amount of unused commitments under the 364-Day Term Loan Facility. We have also agreed to pay a duration fee on the outstanding commitment amount as of May 29, 2026 under the 364-Day Term Loan Facility. We also have the right to prepay borrowings under the 364-Day Term Loan Facility at any time, in whole or in part and without premium or penalty.
Alliance Healthcare debt is comprised of uncommitted revolving credit facilities in various currencies with various rates. A vast majority of the outstanding borrowings as of December 31, 2025 were held in Türkiye. These facilities are used to fund its working capital needs.
Nonrecourse debt is comprised of short-term and long-term debt belonging to the Brazil subsidiaries and is repaid solely from the Brazil subsidiaries' cash flows and such debt agreements provide that the repayment of the loans (and interest thereon) is secured solely by the capital stock, physical assets, contracts, and cash flows of the Brazil subsidiaries.
Share Purchase Programs and Dividends
In March 2024, our Board of Directors (the "Board") authorized a share repurchase program allowing us to purchase up to $2.0 billion of our outstanding shares of common stock, subject to market conditions. In the three months ended December 31, 2025, we did not purchase any shares of our common stock. As of December 31, 2025, we had $882.2 million of availability under this program.
In November 2025, our Board increased the quarterly dividend paid on common stock by 9% from $0.55 per share to $0.60 per share. We anticipate that we will continue to pay quarterly cash dividends in the future. However, the payment and amount of future dividends remains within the discretion of our Board of Directors and will depend upon future earnings, financial condition, capital requirements, and other factors.
Commitments and Obligations
As discussed and defined in Note 9 of the Notes to Consolidated Financial Statements, on July 21, 2021, it was announced that we and the two other national pharmaceutical distributors had negotiated a Distributor Settlement Agreement. The Distributor Settlement Agreement became effective on April 2, 2022, and as of December 31, 2025, it included 48 of 49 eligible states (the "Settling States") as well as 99% by population of the eligible political subdivisions in the Settling States. Our accrued litigation liability related to the Distributor Settlement Agreement and an estimate for non-participating government subsidiaries (with whom we have not reached a settlement agreement), as well as other opioid-related litigation for which we have reached settlement agreements on our Consolidated Balance Sheet as of December 31, 2025 is $4.3 billion and is expected to be paid over the next 13 years. We currently estimate that $426.2 million will be paid prior to December 31, 2026. The payment of the aforementioned litigation liability has not and is not expected to have an impact on our ability to pay dividends.
The following is a summary of our contractual obligations for future principal and interest payments on our debt, minimum rental payments on our noncancellable operating leases, and minimum payments on our other commitments as of December 31, 2025:
| Payments Due by Period (in thousands) | Debt, Including Interest Payments |
Operating Leases |
Other Commitments | Total | ||||||||||||||||||||||
| Within 1 year | $ | 673,660 | $ | 322,454 | $ | 281,694 | $ | 1,277,808 | ||||||||||||||||||
| 1-3 years | 3,201,071 | 567,238 | 518,321 | 4,286,630 | ||||||||||||||||||||||
| 4-5 years | 1,518,806 | 418,846 | 357,327 | 2,294,979 | ||||||||||||||||||||||
| After 5 years | 4,781,442 | 674,938 | 392,331 | 5,848,711 | ||||||||||||||||||||||
| Total | $ | 10,174,979 | $ | 1,983,476 | $ | 1,549,673 | $ | 13,708,128 | ||||||||||||||||||
Included in "Other Commitments" in the above table is $685 million to support our U.S. Healthcare Solutions reportable segment's primary ERP system upgrade and $594 million for other digital transformation projects.
Our liability for uncertain tax positions was $650.1 million (including interest and penalties) as of December 31, 2025. This liability represents an estimate of tax positions that we have taken in our tax returns which may ultimately not be sustained upon examination by taxing authorities. Since the amount and timing of any future cash settlements cannot be predicted with reasonable certainty, the estimated liability has been excluded from the above contractual obligations table. Our liability for uncertain tax positions as of December 31, 2025 primarily includes an uncertain tax benefit related to the legal accrual for litigation related to the distribution of prescription opioid pain medications, as disclosed in Note 9 of the Notes to Consolidated Financial Statements.
Market and Risks
We have exposure to foreign currency and exchange rate risk from our non-U.S. operations. Our largest exposure to foreign exchange rates exists primarily with the U.K. Pound Sterling, the Euro, the Turkish Lira, the Brazilian Real, and the Canadian Dollar. We use forward contracts to hedge against the foreign currency exchange rate impact on certain intercompany receivable and payable balances. We use foreign currency denominated debt held at the parent level to offset a portion of our foreign currency exchange rate exposure on our net investments in Euro-denominated subsidiaries. We may use derivative instruments to hedge our foreign currency exposure, but not for speculative or trading purposes. Revenue from our foreign operations during the three months ended December 31, 2025 was approximately 10% of our consolidated revenue.
We have market risk exposure to interest rate fluctuations relating to our debt. We manage interest rate risk by using a combination of fixed-rate and variable-rate debt. The amount of variable-rate debt fluctuates during the year based on our working capital requirements. We had $1.2 billion of variable-rate debt outstanding as of December 31, 2025. We periodically evaluate financial instruments to manage our exposure to fixed and variable interest rates. However, there are no assurances that such instruments will be available in the combinations we want and/or on terms acceptable to us. There were no such financial instruments in effect as of December 31, 2025.
We also have market risk exposure to interest rate fluctuations relating to our cash and cash equivalents. We had $1.8 billion in cash and cash equivalents as of December 31, 2025. The unfavorable impact of a hypothetical decrease in interest rates on cash and cash equivalents would be partially offset by the favorable impact of such a decrease on variable-rate debt. For every $100 million of cash invested that is in excess of variable-rate debt, a 10-basis point decrease in interest rates would increase our annual net interest expense by $0.1 million.
Deterioration of general economic conditions, among other factors, could adversely affect the number of prescriptions that are filled and the amount of pharmaceutical products purchased by consumers and, therefore, could reduce purchases by our customers. In addition, volatility in financial markets and higher borrowing costs may also negatively impact our customers' ability to obtain credit to finance their businesses on acceptable terms. Reduced purchases by our customers or changes in the ability of our customers to remit payments to us could adversely affect our revenue growth, our profitability, and our cash flow from operations.
Inflation in the global and U.S. economies has impacted certain operating expenses. If inflation persists or increases, our operations and financial results could be adversely affected, particularly in certain global markets.
We have risks from other geopolitical trends and events, such as rising nationalism, the conflict in Ukraine, and evolving conditions in the Middle East. Although the long-term implications of these conflicts are difficult to predict at this time, the financial impact of these conflicts has not been material to our financial results.
Cencora Inc. published this content on February 04, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 04, 2026 at 19:44 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]