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SEC filingMcKesson delivered exceptional profitable growth with revenue up 12.4% to $403.4B from higher pharmaceutical volumes, while dramatic operating income expansion to $6.2B drove record net income of $4.8B and EPS of $38.38 amid steady cash generation.
Revenues increased 12.4% to $403.4 billion for the fiscal year ended March 31, 2026, driven largely by market growth in the North American Pharmaceutical segment. Sales to pharmacies and healthcare providers rose primarily due to higher volumes from retail national account customers, partially offset by branded-to-generic drug conversions and decreases in branded pharmaceutical prices. This volume surge underscores McKesson's strong positioning in serving retail national accounts amid ongoing market expansion.
Gross profit grew 9.2% to $14.6 billion, yielding a 3.6% margin on elevated revenue. The expansion occurred despite mix headwinds from generic conversions and pricing pressures, highlighting effective cost management and scale benefits in the high-volume pharmaceutical distribution model. Operating income advanced even more sharply by 40.5% to $6.2B, achieving a 1.5% margin, as the company controlled expense growth while capitalizing on revenue momentum and operational efficiencies.
These dynamics propelled net income up 44.5% to $4.8 billion, with diluted EPS rising 49.2% to $38.38. The earnings leverage reflects disciplined operations and the low-margin, high-volume nature of pharmaceutical distribution, where incremental revenue flows efficiently to the bottom line once fixed costs are covered.
Cash generation remained robust, with net cash from operating activities at $6.2 billion, slightly above the prior year's $6.1 billion. Free cash flow reached $5.7 billion after $436 million in capital expenditures, down from $537 million, signaling optimized investment levels. This supports McKesson's commitment to quarterly cash dividends going forward, while enabling compliance with extensive regulatory requirements in the pharmaceutical supply chain.
Operationally, McKesson continues to prioritize supply assurance solutions to enhance product availability and inventory management of critical items, including its Pinpoint Community Solutions for independent pharmacies. Federal and state laws rigorously regulate the drug supply chain to prevent counterfeit or contaminated products, necessitating significant compliance investments. Management notes ongoing focus from stakeholders on governance and sustainability practices, including human capital and environmental responsibility, amid potential capital market volatility that could impact liquidity.