McKesson Corporation (MCK) - Fiscal 2026 10-K Summary
Business Context and Reporting Period
Company: McKesson Corporation
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal Year ended March 31, 2026
Business Overview: A diversified healthcare services leader providing pharmaceutical distribution, oncology and multispecialty solutions, prescription technology, and medical-surgical supplies. Commencing in Q2 FY2026, the company implemented a new four-segment reporting structure: North American Pharmaceutical, Oncology & Multispecialty, Prescription Technology Solutions, and Medical-Surgical Solutions. The company completed the sale of its Norwegian operations during the fiscal year.
Key Financial Metrics
| Metric (in millions, except per share) | Fiscal 2026 | Fiscal 2025 | Change |
|---|---|---|---|
| Revenues | $403,430 | $359,051 | +12% |
| Gross Profit | $14,550 | $13,323 | +9% |
| Gross Margin | 3.61% | 3.71% | -10 bps |
| Operating Income | $6,212 | $4,422 | +40% |
| Net Income (Attributable to MCK) | $4,762 | $3,295 | +45% |
| Diluted EPS | $38.38 | $25.72 | +49% |
| Operating Cash Flow | $6,155 | $6,085 | +1% |
| Total Debt | $6,526 | $5,654 | +15% |
| Cash & Equivalents | $3,975 | $5,691 | -30% |
Material Changes vs. Prior Period
- Revenue Growth: Driven by market growth in the North American Pharmaceutical segment (higher volumes from retail national accounts) and significant expansion in the Oncology & Multispecialty segment (+31% revenue) due to provider additions and specialty pharmaceutical sales.
- Profitability: Net income increased 45% primarily due to higher operating income, a favorable LIFO credit of $210 million (vs. a charge of $82 million in FY2025), and lower operating expenses as a percentage of revenue (2.07% vs. 2.48%).
- Divestitures: Completed the sale of the Norway disposal group for an adjusted purchase price of $821 million, recording a net gain of $480 million.
- Acquisitions: Acquired controlling interests in PRISM Vision ($875 million) and Core Ventures ($2.5 billion), both reported within the Oncology & Multispecialty segment.
- Restructuring: Recorded $245 million in restructuring charges, primarily related to enterprise-wide initiatives to modernize technology and drive operational efficiencies.
Guidance, Outlook, and Risks
Outlook: Specific fiscal 2027 guidance is not included in this filing but is referenced as being contained in a separate Form 8-K filed May 7, 2026. Management anticipates continued quarterly cash dividends and share repurchases.
Strategic Developments:
- Medical-Surgical Separation: Announced a definitive agreement for Apollo Global Management to acquire a ~13% minority interest in the Medical-Surgical Solutions segment for approximately $1.25 billion in convertible preferred equity, subject to regulatory approval.
- Capital Allocation: Returned $5.1 billion to shareholders in FY2026 ($4.8 billion in repurchases, $381 million in dividends). On April 29, 2026, the Board authorized an additional $5.0 billion in share repurchases.
Key Risks & Contingencies:
- Opioid Litigation: Accrued liability for opioid-related claims stands at $5.7 billion as of March 31, 2026. The company is unable to estimate the upper or lower range of ultimate possible losses for all matters.
- Regulatory Environment: Significant uncertainty regarding healthcare reform, including the Inflation Reduction Act (IRA), the "One Big Beautiful Bill Act" (OBBBA), and CMS rules on bona fide service fees and drug pricing.
- Cybersecurity: Ongoing risk of cyberattacks and data breaches, with the company noting increased sophistication of threats including AI-enabled attacks.
Investor Verification Checklist
- Opioid Liability: Verify the $5.7 billion accrued liability and the potential for additional unquantified losses from ongoing litigation.
- Medical-Surgical Separation: Monitor the status of the Apollo Global Management transaction and regulatory approvals for the planned spin-off.
- Customer Concentration: Note that the top 10 customers represent 73% of revenue, with CVS Health alone accounting for 24% of revenue and 21% of trade receivables.
- Regulatory Impact: Assess the potential financial impact of new federal legislation (OBBBA) and CMS rulemaking on drug pricing and reimbursement models.
- Debt Structure: Review the new $5.0 billion revolving credit facility entered into in April 2026 and the associated covenants.