Executive Summary#

Strong Q1 Execution Validates Infrastructure Thesis#

Cardinal Health delivered a decisive operational performance in the first quarter of fiscal year 2026, reporting earnings that exceeded consensus expectations while simultaneously raising its full-year guidance on the strength of accelerating specialty pharmaceutical demand. The company's Q1 results—which showed revenue growth of 22 percent to $64 billion and non-GAAP diluted earnings per share expansion of 36 percent to $2.55—arrive just weeks after management announced plans to construct a major pharmaceutical distribution facility in Indianapolis, a capital deployment decision that suddenly appears vindicated by the very demand trends now materializing. For investors who followed the October 3rd announcement of the Indianapolis facility with skepticism regarding whether management's confidence in specialty pharma growth could withstand near-term macroeconomic uncertainty and elevated leverage constraints, the Q1 earnings provide concrete operational evidence that the infrastructure investment thesis rests on accelerating fundamentals rather than hope. The guidance raise—which lifted non-GAAP EPS expectations to a range of $9.65 to $9.85, representing growth of 17 to 20 percent for the full fiscal year—signals that management believes the momentum observed in the quarter will persist throughout 2026, reinforcing management's capital allocation discipline and strategic conviction in the specialty distribution opportunity.