McKesson’s second quarter results surpassed Wall Street’s expectations for both revenue and adjusted earnings. Management attributed the company’s top-line growth to increased prescription volumes, particularly in specialty pharmaceuticals and GLP-1 medications, as well as recent acquisitions in oncology and ophthalmology. CEO Brian Tyler highlighted the strategic importance of scaling automation across distribution centers, which has driven measurable improvements in operating leverage and efficiency. However, the flat operating margin and challenges related to industry headwinds, such as evolving payer policies and the impact of recent divestitures, tempered management's tone despite the strong results.
Is now the time to buy MCK? Find out in our full research report (it’s free).
McKesson (MCK) Q2 CY2025 Highlights:
- Revenue: $97.83 billion vs analyst estimates of $96.48 billion (23.4% year-on-year growth, 1.4% beat)
- Adjusted EPS: $8.26 vs analyst estimates of $8.15 (1.4% beat)
- Adjusted EBITDA: $1.52 billion vs analyst estimates of $1.48 billion (1.6% margin, 2.3% beat)
- Management slightly raised its full-year Adjusted EPS guidance to $37.50 at the midpoint
- Operating Margin: 1.1%, in line with the same quarter last year
- Market Capitalization: $81.97 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From McKesson’s Q2 Earnings Call
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Eric R. Percher (Nephron Research) asked about the sustainability of growth in Prescription Technology Solutions and whether upside potential exists for the full year. CFO Britt Vitalone replied that growth will depend on utilization trends, product launches, and ongoing investment in access and affordability solutions.
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Lisa Christine Gill (JPMorgan) questioned the impact of Rite Aid’s store closures and bankruptcy on core pharma operations. Vitalone stated that the effects are immaterial and that specialty growth and acquisitions are the main momentum drivers.
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Charles Rhyee (TD Cowen) pressed for details on the outlook for prior authorization services, especially given insurer initiatives on GLP-1 drugs. Both Vitalone and CEO Tyler indicated volumes are steady and performance aligns with expectations, with only minor payer-driven changes noted.
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Allen Charles Lutz (Bank of America) inquired about brand price increases, generic pricing, and the effect of tariffs. Vitalone said pricing remains stable and tariffs have not materially altered guidance, while Tyler noted pharmaceutical supply chains are resilient.
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Daniel R. Grosslight (Citi) asked about biosimilar adoption and the impact of recent launches in retina and other channels. Tyler described biosimilars as a steady long-term contributor, with no material short-term impact yet observed.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will focus on (1) the pace of integration and revenue contribution from PRISM Vision and Core Ventures, (2) adoption rates and profitability trends in Prescription Technology Solutions, particularly as new payer requirements evolve, and (3) the impact of automation initiatives on operating margins. Developments around tariffs and completion of the Norway divestiture will also serve as important markers for McKesson’s execution and strategic alignment.
McKesson currently trades at $655, down from $704.53 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
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