AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 5/6 · 18/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Distribution infrastructure and integrated ordering are demonstrated, but comparative cost superiority, network effects and meaningful switching burdens are not established.
durability · — · The passages do not establish how long any structural advantage would persist. Annual contract expirations and customer losses limit inference from existing relationships.
customer dependency · — · Primary-source commitments and higher sales to major customers indicate recurring relationships, but do not establish customers' dependence on Cencora specifically. Realized losses show some customers can leave.
erosion resilience · — · Growth despite lost customers demonstrates operating resilience, but acquisitions and industry utilization prevent attributing that resilience to a protected structural advantage.
Pricing power38
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 1/4 · Recent manufacturer price declines reduced U.S. sales, while manufacturer increases benefited international operating income. These observed outcomes demonstrate dependence on external prices and weak evidence of autonomous pricing power; Cencora's own fee realization is unquantified.
retention · 2/4 · Indirect operating evidence is mixed: sales to the two largest customers increased in fiscal 2025 and volumes continued growing in 2026, but oncology and grocery customer losses reduced sales. No retention rate is inferred.
margin resilience · 2/4 · Nine-month gross profit and operating income grew faster than revenue despite manufacturer price declines and customer losses. Acquisitions and litigation credits contributed to reported performance, so the result demonstrates mixed resilience rather than durable pricing protection.
contractual freedom · 1/4 · Brand sales use manufacturer WAC references or negotiated customer prices, and part of gross profit depends on manufacturer price increases outside Cencora's control. Contracts permit negotiation, but unilateral repricing rights are not demonstrated.
Predictability100
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 1.15
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 0.13
Financial strength64
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 80.16
- netDebtEbitGrade
- 74.86
- interestCoverageGrade
- 89.73
- currentRatioGrade
- 12.28
- Debt / FCF (x)
- 2.39
- Net debt / operating income (x)
- 1.26
- Current ratio (x)
- 0.90
- cashInterestPaid
- 356.50
- cashInterestCoverage
- 10.87
Capital allocation100
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 84.01
- 3-year average dilution (%)
- -2.40
- 3-year average SBC / revenue (%)
- 0.05
- cashConversionGrade
- 100.00
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Reported fiscal 2025 adjusted free cash flow of $3.0 billion and subsequent debt repayments support cash generation and financing discipline. Repeated PharmaLex impairments, a further consulting impairment and substantial debt-funded acquisition spending provide realized counterevidence. Acquisition returns and repurchase value creation remain unproven.
incentive alignment · 3/4 · Disclosed fiscal 2025 compensation was predominantly incentive-based, with relative shareholder-return conditions and post-vesting holding requirements. The committee actually reduced bonus payouts for business underperformance. These are demonstrated arrangements and actions, although executive ownership amounts and the ultimate results of outstanding awards are absent.
execution · 2/4 · Volume growth, increasing operating income and completed acquisitions demonstrate delivery, assessed partly through indirect operating evidence. Industry demand and acquired earnings explain part of growth; customer losses and repeated impairments show uneven execution.
governance · 2/4 · An independent chair, mandated committee independence, an unqualified internal-control opinion and exercised compensation discretion support functioning oversight. The substantial accrued opioid-related liability is realized adverse evidence that tempers the assessment of historical oversight; current structures do not prove exceptional governance durability.
Evidence
Significant capital expenditures in fiscal 2025 included investments relating to the expansion and enhancement of our distribution network and various technology initiatives.
MD&A / capital expenditures / distribution network investment · Filed 25/11/2025
These costs, which were $1,294.4 million, $1,265.7 million, and $1,200.0 million for fiscal 2025, 2024, and 2023, respectively, are included in Distribution, Selling, and Administrative in the Company’s Consolidated Statements of Operations.
Accounting policies / shipping and handling costs · Filed 25/11/2025
The U.S. Healthcare Solutions segment grew its revenue by $25.6 billion, or 9.7%, from the prior fiscal year 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 increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class of $7.7 billion, or 26.9%.
MD&A / fiscal 2025 U.S. revenue growth drivers · Filed 25/11/2025
Our pharmaceutical distribution businesses not only compete with other pharmaceutical distributors, but also with manufacturers who sell directly to customers, chain drugstores who manage their own warehousing, specialty distributors, and packaging and healthcare technology companies.
Risk factors / competing distribution models · Filed 25/11/2025
U.S. Healthcare Solutions’ revenue increased by $3.5 billion, or 4.9%, and $9.1 billion, or 4.3%, from the prior year quarter and nine-month period, respectively, 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 increased sales of $2.3 billion, or 25.5%, and $5.2 billion, or 19.7%, from the prior year quarter and nine-month period, respectively, of products labeled for diabetes and/or weight loss in the GLP-1 class, offset in part by a decline in manufacturer prices related to certain brand pharmaceutical products, a decrease in sales due to losses of an oncology customer and a grocery customer (in the nine-month period only), and lower sales to our large mail order customer as a result of brand conversions.
MD&A / U.S. revenue / volume growth, manufacturer price declines and customer losses · Filed 05/08/2026
U.S. Healthcare Solutions’ ERP system provides for, among other things, electronic order entry by customers, invoice preparation and purchasing, and inventory tracking.
Business / ERP ordering and inventory functions · Filed 25/11/2025
The loss of a supplier could adversely affect our business if alternate sources of supply are unavailable since we are committed to be the primary source of pharmaceutical products for a majority of our customers.
Business / primary-source customer commitments and supply dependence · Filed 25/11/2025
Sales, including GLP-1 products, to our two largest customers increased by $6.2 billion from the prior fiscal year.
MD&A / increased sales to two largest customers · Filed 25/11/2025
The Company believes the acquisition of OneOncology allows it to broaden its relationships with community oncology providers and to build on its leadership in specialty pharmaceuticals within its U.S.
Note 2 / management's expected relationship benefits from OneOncology · Filed 05/08/2026
A number of our contracts with customers, including group purchasing organizations, are typically subject to expiration each year.
MD&A / customer contract expirations · Filed 25/11/2025
In fiscal 2025, Walgreens and Boots together accounted for approximately 25% of revenue and Evernorth Health Services accounted for approximately 13% of revenue.
Business / fiscal 2025 customer concentration · Filed 25/11/2025
We sell brand-name pharmaceutical products to many of our customers using WAC as the reference price and to other customers based on their negotiated contract price.
Risk factors / WAC reference prices and negotiated customer prices · Filed 25/11/2025
As a result, our gross profit from brand-name and generic pharmaceuticals continues to be subject to fluctuation based upon the timing and extent of manufacturer price increases, which we do not control.
Risk factors / manufacturer price increases outside company control · Filed 25/11/2025
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three months ended June 30, Nine months ended June 30, (in thousands, except per share data) 2026 2025 2026 2025 Revenue $ 84,754,837 $ 80,663,532 $ 249,042,769 $ 237,604,265 Cost of goods sold 81,147,602 77,756,417 238,775,124 229,079,303 Gross profit 3,607,235 2,907,115 10,267,645 8,524,962 Operating expenses: Distribution, selling, and administrative 2,132,465 1,672,881 5,905,313 4,744,976 Depreciation 150,960 128,128 417,384 362,655 Amortization 118,539 125,867 361,808 429,650 Litigation and opioid-related (credit) expenses, net (88,643) 17,974 (160,936) 46,263 Acquisition and divestiture-related deal and integration expenses 113,069 52,838 355,652 190,930 Restructuring and other expenses, net 60,628 41,773 115,667 140,390 Impairment of assets, including goodwill — — 249,498 — Operating income 1,120,217 867,654 3,023,259 2,610,098 Other income, net (16,882) (110,417) (1,123,921) (48,997) Interest expense, net 140,705 81,794 353,574 213,715 Income before income taxes 996,394 896,277 3,793,606 2,445,380 Income tax expense 219,727 206,528 821,285 544,495 Net income 776,667 689,749 2,972,321 1,900,885 Net income attributable to noncontrolling interests (13,149) (2,347) (7,824) (7,012) Net income attributable to Cencora, Inc.
Consolidated statements of operations / nine months ended June 30, 2026 · Filed 05/08/2026
The increase from the prior year nine-month period is primarily due to the February 2026 acquisition of OneOncology, the January 2025 acquisition of RCA, and increased pharmaceutical sales.
MD&A / acquisition and sales contributions to U.S. gross profit growth · Filed 05/08/2026
The increase from the prior year quarter is primarily due to increased operating income at our European distribution business, which was primarily driven by manufacturer price increases in a developing market country, and our global specialty logistics business, and the increase from the prior year nine-month period is primarily due to an increase in operating income at our global specialty logistics business.
MD&A / international operating income drivers · Filed 05/08/2026
We completed our required annual impairment assessments relating to goodwill and indefinite-lived intangible assets in fiscal 2025, 2024, and 2023 and, as a result, recorded goodwill impairments (see Note 5 of the Notes to Consolidated Financial Statements) of $723.9 million and $418.0 million in our PharmaLex reporting unit in fiscal 2025 and 2024, respectively.
Critical accounting estimates / PharmaLex goodwill impairments · Filed 25/11/2025
Note 2. Acquisitions OneOncology Acquisition On February 2, 2026, the Company acquired the majority of the outstanding equity interests that it did not previously own in OneOncology, a physician-led national platform empowering independent medical specialty practices rooted in oncology, for total fair value consideration of $7,387.1 million, which included cash consideration of $4,648.7 million, $1,934.2 million of fair value of its previously held equity method investment, $752.1 million of estimated contingent consideration for certain OneOncology physicians and members of management that retained an 8% interest in OneOncology, and $52.0 million for the settlement of a receivable resulting from a pre-existing commercial arrangement between the Company and OneOncology.
Note 2 / completed OneOncology acquisition consideration · Filed 05/08/2026
Net cash provided by financing activities of $2.3 billion in the nine months ended June 30, 2026 principally resulted from the $3.0 billion issuance of senior notes and $1.5 billion of term loan borrowings to finance a portion of the acquisition of OneOncology, offset in part by $1.0 billion of purchases of our common stock, $900.0 million of term loan repayments, $360.6 million in cash dividends paid on our common stock, and $105.3 million in purchases of our common stock related to employee tax withholdings related to restricted share vesting.
Liquidity / acquisition financing, repayments and capital returns · Filed 05/08/2026
Collis at the end of fiscal 2025. Fiscal 2025 performance Total Shareholder Return 40% Revenue $321.3B Up 9.3% Adjusted Operating Income(1) $4.2B Up 15.8% Adjusted Diluted EPS(1) $16.00 Up 16.3% Adjusted Free Cash Flow(1) $3.0B (1)Adjusted Operating Income, Adjusted Diluted Earnings Per Share (“Adjusted EPS”), and Adjusted Free Cash Flow are non-GAAP financial measures.
Company highlights / fiscal 2025 results and non-GAAP free cash flow · Filed 22/01/2026
In fiscal 2025, incentive compensation (comprised of an annual cash bonus and equity incentive awards) accounted for approximately 91% of our CEO’s total target direct compensation and approximately 84% of the other NEOs’ average total target direct compensation.
Executive compensation / actual fiscal 2025 target compensation mix · Filed 22/01/2026
Consistent with our design in the prior three years and in consideration of feedback received from our shareholders, the Compensation Committee included the following features in our fiscal 2025 performance share awards: 1.A relative TSR modifier with above median performance required for a target payout, as described in more detail below; and 2.A post-vest holding requirement of two years for the CEO, and one year for the other NEOs at the time of grant on 50% of earned performance shares.* * Because our annual grants are made in the first quarter of the fiscal year, this provision applies to our CFO and the NEOs identified from the prior fiscal year.
Executive compensation / fiscal 2025 performance award modifier and holding requirements · Filed 22/01/2026
As shown in the table above, the Company’s performance would have resulted in a 185.3% payout; however, following discussions with Pearl Meyer and management, the Compensation Committee exercised discretion and reduced the total payout percentage to 181.3%.
Executive compensation / exercised discretion reducing bonus payout · Filed 22/01/2026
The Compensation Committee determined to make this reduction in recognition of the underperformance of a business within our International Healthcare Solutions reportable segment.
Executive compensation / business underperformance underlying payout reduction · Filed 22/01/2026
Additionally, our Corporate Governance Principles mandate the independence of the committee chairs and all the members of our Audit, Compensation and Governance Committees, and affirm non-employee directors’ access to managers and team members outside the presence of our executives.
Corporate governance / committee independence and director access · Filed 22/01/2026
Upon Steve’s retirement, the Board determined that I should transition from Lead Independent Director to Board Chair on October 1, 2025.
Board leadership / completed transition to independent chair · Filed 22/01/2026
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of September 30, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated November 25, 2025 expressed an unqualified opinion thereon.
Independent auditor report / internal control opinion · Filed 25/11/2025
Our accrued litigation liability related to the Distributor Settlement Agreement, as well as other opioid-related litigation for which we have reached settlement agreements on our Consolidated Balance Sheet as of June 30, 2026 is $4.2 billion and is expected to be paid over the next 13 years.
Commitments and obligations / accrued opioid-related litigation liability · Filed 05/08/2026
We confirm compliance with guidelines annually at the end of each fiscal year and, as of September 30, 2025, all of our then-serving non-employee directors were in compliance with the stock ownership guidelines or had not yet completed their fifth year as a director.
Director compensation / stock ownership compliance and grace periods · Filed 22/01/2026
Consulting Services business that was divested in April 2026, offset in part by the litigation and opioid-related credit in the current year nine-month period in comparison to an expense in the prior year nine-month period.
MD&A / consulting business impairment and completed divestiture · Filed 05/08/2026
