Cencora (COR) Q3 2026 earnings call transcript

I will now hand the conference over to Bennett Murphy. Bennett, please go ahead. Good morning. Good afternoon. Thank you all for joining us for this conference call to discuss Senkora's Fiscal 2026 third quarter results. I am Bennett Murphy, Senior Vice President of Best Relations and Enterprise Productivity. Joining me today are Bob Munch, President and CEO, and Eva Barato, Executive Vice President and CFO. On today's call, we would be discussing non-GAP financial measures, reconciliation of these measures to GAP are provided within today's press release, which is available on our website at investor. senkora. com. We've also posted a slide presentation to a company today's press release on our investor website. During this conference call, we will discuss four looking statements about our business and financial expectations on an adjusted non-GAP basis, including but not limited to EPS, operating income and income taxes.

Four looking statements are based on management's current expectations and are subject to uncertainty and change. For discussion of key risks and assumptions, we refer you to today's press release and our SEC filings, including our most recent 10Q. Senkora assumes no obligation to update any forward-looking statements, and this call cannot be broadcast without the permission of the company. You have the opportunity to ask questions after today's remarks by management. We ask that you limit your questions to one per participant in order for us to get to as many as possible in the hour.

With that, I will turn the call over to Bob.

Thank you, Bennett. Hi, everyone. And thank you for joining Senkora's fiscal 2026 third-quarter earnings call. To start, I'd like to thank our Senkora team members for their continued commitment to providing valuable solutions for our customers.

In our third quarter, we delivered strong results driven by execution across Senkora and investments to advance our specialty positioning and our pharmaceutical centric strategy. Our business performance drove double-digit adjusted operating income growth and supported by $1 billion of opportunistic sharing purchases we achieved 12% EPS growth in the quarter.

We're pleased to be raising our fiscal 2026 EPS guidance, reflecting our confidence in our continued execution and the strength of our portfolio as we close out the fiscal year. I'm very happy Eva Barato has joined us as Chief Financial Officer. She will provide details on our performance and continued confidence in our short and long-term expectations. During my remarks today, I'll highlight how our strategy enables us to deliver on our growth priorities.

First, our differentiated specialty pharmaceutical platform uniquely positions us to support innovation and patient care across our footprint. Second, through our digital transformation, we are modernizing how we operate and serve our partners. And finally, our focus on talent and culture is equipping our teams with the skills, resources and leadership needed to continue advancing our pharmaceutical centric strategy and delivering our purpose. I'll start with specialty where our platform supports growth across the healthcare ecosystem. Our specialty platform builds on our strong foundation in pharmaceutical distribution and deep relationships with providers and manufacturers. Over time, we've expanded our capabilities into a broad set of services designed to address the needs of specialty care. Over nearly three decades, St. Cora has worked alongside community providers to advance our distribution, TPO and practice solutions, helping physicians operate effectively and care for patients close to home.

As specialty care has become more complex, these providers are seeking partners who can help them navigate access reimbursement and administrative demands while preserving their ability to deliver care in community based settings. Our management services organizations are well positioned to help oncology and retina practices manage the growing complexity of specialty care and broaden access to clinical trials and research while allowing physicians to remain focused on patient care. Importantly, our role across the specialty landscape gives us a clear view of what it takes for new therapies to reach patients. That unique perspective informs the work we do with manufacturers who increasingly need partners with the infrastructure, expertise and connectivity to enable successful launches and protect product integrity.

Across St. Cora, our specialty logistics, 3PL and commercialization services help bring innovation to market and drive reliable access to therapies. Before moving to the next topic, I want to reiterate our confidence in the values St. Cora provides and our ability to help all stakeholders navigate the impact of market dynamics as we've demonstrated. As the market continues to digest and annualize list price changes, the value proposition of the services we provide remains clear. We're well positioned through our distribution footprint, sourcing scale and end-to-end channel relationships. Importantly, Part B biosimilars will continue to be an opportunity for St. Cora to drive value for all stakeholders while taking cost out of the healthcare system and improving patient access.

Moving to our digital transformation, where we're combining business process improvement and technology advances to improve how we operate and work with partners across the healthcare system. A tangible example of this is our work and demand forecasting. Our teams are using AI to better anticipate product needs across our network and identify key factors driving changes in demand. In a business like ours, these tools help improve planning, enhance product availability and maintain reliable service for providers, pharmacies and health systems. Across our organization, we're applying the same discipline approach to simplify routine activities and give our team members better insights.

That allows team members to spend less time on manual processes and more time using their expertise to work with partners and solve problems. Next, through our focus on talent culture, we're equipping our teams to continue advancing our pharmaceutical centric strategy and delivering on our purpose. Across St. Cora, our teams bring the expertise and commitment needed to serve providers, manufacturers and patients in an evolving healthcare environment.

We're focused on ensuring our talent has clear career paths while strengthening our ability to execute for customers and partners. That focus extends to key roles across the organization. This quarter, in addition to EVA, we welcome Sam Hammack as chief human resources officer. Since joining the company, both EVA and SAM have brought valuable expertise and proven to be excellent enterprise leadership team members. I also want to recognize the significant contributions of Jim Cleary and Sylvana Bataglia, who recently retired as CFO and CHRO. Both will continue as advisors through the end of the calendar year.

With that, I'll turn the call over to EVA for a discussion of our financial results and updated fiscal 2026 guidance. We're glad to have her here with us today for her first earnings call at CFO. EVA?

Thanks Bob and good morning everyone. It's a pleasure to join the call today and I look forward to engaging with the investor community in the coming weeks and months. Since joining St. Cora in June, I've spent time with leaders across the enterprise and deepened my understanding of the strength of our businesses. The durability of our pharmaceutical centric strategy and the financial discipline that underpins our long-term growth algorithms. Today, I'll provide an overview of our consolidated fiscal 2026 third quarter results and segment level results before turning to our updated guidance. Unless otherwise stated, my remarks will focus on our adjusted non-GAP financial results. For further discussions of our GAP results, please refer to our earnings press release and presentation.

Our third quarter performance reflects the strength of our pharmaceutical centric strategy, the breadth of our specialty platform and our discipline capital deployment. Adjusted operating income grew 17% driven by strong execution in our U. S. healthcare solution segment, including the performance of our one oncology acquisition and continued growth in our international segment. While share repurchases also contributed to the 12% adjusted earnings for share growth. Based on our year-to-day performance and confidence in continued execution, we are raising our adjusted EPS guidance for fiscal 2026 to a range of 1775 to 1795. Turning now to consolidated revenue, revenue was $84.8 billion, up 5%, driven by growth in both reportable segments and in other, which I will describe in more detail when discussing segment level results.

Moving to gross profit, consolidated adjusted gross profit was $3.5 billion, up 23%, primarily due to growth in the U. S. healthcare solution segment. In the quarter, consolidated gross profit margin expanded by 61 basis points to 4.16%, largely due to our acquisition of one oncology in February.

Consolidated adjusted operating expenses were $2.3 billion, an increase of 27%, which again reflects the impact of the February 2026 acquisition of one oncology, excluding both MSOs operating expenses grew 5% on a constant currency basis. Turning now to operating income, consolidated adjusted operating income was $1.2 billion, an increase of 17% compared to the prior year, driven by double digit growth across both reportable segments and other. Moving now to our net interest expense and effective tax rate for the third quarter, net interest expense was $141 million, an increase of $59 million, compared to the prior year quarter, primarily due to the debt raised in February to finance the one oncology acquisition.

We have made significant progress on our debt repayment commitment and have fully paid off our RCA financing related term loan balance of $800 million, $400 million repaid in the June outcome tax rate was 19.9% compared to 20.7% in the prior year quarter.

Finally, diluted share count was 193.9 million shares, a 0.7% decrease compared to the prior year quarter as a result of $1 billion of share repurchases in the quarter at an average price of $268 per share.

Regarding our cash balances and adjusted free cash flow, we ended June with $2.8 billion of cash and had strong free cash flow generation, which results in year to date adjusted free cash flow of $1.1 billion. Our full year adjusted free cash flow guidance of approximately $3 billion remains unchanged.

Now I'll turn to our segment results for the third quarter and key drivers of our performance, starting with the US healthcare solution segment. Our US healthcare solutions revenue was $74.9 billion, an increase of 5%. In the quarter, our revenue growth was supported by strength in specialty across both health systems and physician practices. We also saw continued growth in sales of GLP ones, which increased by $2.3 billion year over year. The growth was offset by three items.

First, manufacturer list price reductions that represented a $2.4 billion headwind to revenue growth. Second, the 2025 loss of an oncology customer. And lastly, lower sales to our large mail order customer as expected and consistent with second quarter. Moving now to operating income, US healthcare solution segment operating income increased 16% to $966 million. In the quarter, we saw strong growth in specialty across our MSOs, health systems, and community provider businesses. We were particularly pleased with the performance of our MSO platform with both one oncology and RCA performing ahead of our expectations. Our core business continued to demonstrate its strength and value delivering double-digit organic operating income growth when excluding the one oncology contribution and the loss of the oncology customer last July.

I'll now turn to our international healthcare solution segment. International healthcare solutions revenue was $7.7 billion, up 6%, on both an as reported and constant currency basis driven by growth in our European distribution and specialty logistics businesses. World Courier and European 3PL. In the quarter, international healthcare solutions operating income was $166 million, up 21% on an as reported basis and up 23% on a constant currency basis. In the quarter, our European distribution business continued to benefit from the shift in timing of manufacturer price adjustments in a developing market country, again in the third quarter. And there was strength across our global specialty logistics and European 3PL businesses that delivered double-digit operating income growth.

Moving to other, which reflects the businesses for which we are pursuing strategic alternatives, revenue and other was $2.3 billion, up 7%, largely due to growth at pro-farma and MWI animal health. Operating income was $109 million, up 25% due to operating income growth at MWI animal health, which also benefited from being accounted for as held for sale. That completes the review of our segment level results. I'll now discuss our updated fiscal 2026 guidance.

Driven by our strong performance and opportunistic share repurchases, we are pleased to raise our full-year adjusted EPS guidance range to $17.75 to $17.95 up from $17.70 to $17.90. There is no change to our full-year guidance for consolidated or U. S. healthcare solutions revenue. As you continue to refine your models for our full-year U. S. revenue, we would expect revenue to be in the lower half of our four to six percent growth range, given current expectation. In the international healthcare solution segment, we now expect revenue growth to be approximately eight percent at the low end of our previous range as a result of the stronger dollar in the second half of the year. On a constant currency basis, we expect international healthcare solutions segment revenue growth to be approximately seven percent.

In other, we anticipate revenue growth of approximately six percent. Moving to operating income, we are raising the bottom end of our guidance for consolidated operating income growth, and now expect growth to be in the range of 13 to 14 percent. At a segment level, we now expect U. S. healthcare solution segment operating income growth to be in the range of 14.5 to 15.5 percent.

This contemplates continued strong growth in the U. S. healthcare solution segment, as we have now fully lapped the loss of the oncology customer, continue to benefit from the one oncology acquisition, and have an easier expense comparison in the fourth quarter. In the international healthcare solution segment, we now expect both as reported and constant currency operating income growth to be approximately nine percent. In other, we now expect operating income growth to be approximately 10 percent, reflecting MWI's strong execution and performance. Moving now to our below-the-line items, we now expect net interest expense to be approximately 490 million dollars, up from our previous expectations of approximately 485 million dollars, primarily reflecting lower interest income following the one billion dollars in share repurchases we completed in the quarter.

As a result of these repurchases, we are also updating our expectations for full-year diluted shares outstanding to be approximately 194 million shares. Looking ahead to fiscal 2027, we are currently in the midst of our fiscal 2027 planning process and will provide full fiscal year 2027 guidance on our November earnings call. That said, I wanted to offer some perspectives as you think about your models.

First, as we announced in February, we have reached an agreement to merge MWI animal health with Covetris. We are continuing to work through the regulatory process and have no update on timing. However, for modeling purposes, if the transaction were to close at the midpoint of our fiscal year, we would have a 150 million dollar operating income headwind within other. Given the structure of the transaction that includes upfront cash, preferred equity, and common equity, it would partially offset the earnings headwind netting to an EPS headwind of approximately 35 cents.

Second, we do not have an update on the expected timing of the iSouth Retina Carval acquisition. As a result, we would not suggest incorporating that into the models at this time. Cencore is well positioned across our core U. S. and international healthcare solution segments, giving us confidence in our long-term guidance. Although I've only been the CFO for a month, I've been impressed by the strength of our talent, the clarity of our strategy, and dedication to our purpose. As I look to fiscal 2027 and beyond, I'm excited to further Cencore's strong track record of execution and disciplined capital stewardship to drive durable shareholder value creation.

Now, I'll turn the call back to Bob for some closing remarks before we move to Q&A. Bob?

Thank you, Eva. To close, we were pleased with our strong third-quarter performance, which supports our increased fiscal 2026 guidance as a testament to the power of our pharmaceutical-centric strategy. I look forward to closely working with Eva as we continue building upon our track record of execution, growth, and disciplined capital deployment to deliver on our long-term guidance. Power by our purpose, we continue to execute against our growth priorities and performance drivers, positioning Cencore to deliver sustainable long-term value creation.

As we look ahead, we remain confident in our ability to deliver continued growth in our U. S. and international health care solution segments consistent with our long-term guidance, and we look forward to sharing our 2027 outlook on the November call. We'll now open the call for questions.

Thanks for the question, Lisa, and appreciate your kind words, and I'm super excited to join Sincora. And I'll start with your Q3 question. We're really pleased with the performance and the execution in the quarter. On the outperformance, it was largely in the U. S. segment with strength in our MSOs and underlying business trends in the core, with strength in specialty in both health systems as well as physician providers. One oncology did outperform our expectations, demonstrating the strength of their platform, and its ability to attract physicians to the MSO, which we've benefited from overall distribution and GPOs for some time. Excluding the loss, as you said, of Florida cancer and the contribution from one oncology, our operating income growth was up double digits, a meaningful acceleration from the 7% last quarter.

I'll let it turn it over to Bob on on 2027.

Thanks, Eva. Hi, Lisa. Thank you. Thank you for the question. And yeah, we're really excited that Eva is here with us to help us continue to execute at a very high level. You know, on your question about 2027. So Eva gave some modeling guidance that will help, you know, everyone kind of estimate where, you know, we should be for the year. I'm not going to take it any farther than that, but I will reiterate kind of what I was meaning to say in the remarks is that we are confident in our long-term guidance and feel like our execution, the market strength, and the strength of our portfolio will continue to have us within that range.

Hey, Glenn, thanks for the question. And it is important on a lot of levels. And I appreciate the opportunity to explain. So we absolutely did call out the acceleration of the businesses in RCA and one onc. And the market absolutely performed well. And we have these amazing platforms in RCA and one oncology that certainly we're meeting the needs of patients through that market acceleration. And we believe we'll continue to do so. And Eva can spend a little bit more time on kind of expectations and kind of where we were relative to those. But I do want to spend a minute on the biosimilar part of your question and the kind of part D versus part D, because I do think it's important for everyone to understand how we think about it.

And I'll start with part D. And well, maybe I'll start with biosimilars are good. Biosimilars are good for patients. They're good for cost. They're good for patient access. And so anywhere in our business, it's an incremental positive from a profit standpoint. And part D, it's less so because we provide less services, less wraparound services in the part D space when a product goes from an innovator brand to a biosimilar. And as we saw last quarter with our large mail order customer, that may be insourced. And so then we have the revenue decrease, but not a meaningful profit increase. So when we talk about the part D space, biosimilars are good, incrementally positive. For part B, it's much more important as you alluded to.

And that is because the part B, buy and bill infusion space, which is where our MSOs, where our distribution and GPOs have such a long history of supporting physicians. And within that history, and I talked about GPO and the MSO. And when we talk about wraparound services, those are all the things that we do to support those products coming to market from a physician perspective, I mean, from a manufacturer perspective, and then support the physicians and understanding how they may choose to use those products. So that's therefore, there's a larger profit opportunity because we play a bigger role in how they're, how they're assessed and utilized. So we should think, again, kind of all the way back, biosimilars are good for Sancora, part D, much less so, but still good.

Even though we'll have a revenue pressure from time to time with those switches, but part B will always be good. And we feel very confident about the durability of that over the long term.

Your next question to add on, Eva, why don't you go ahead.

Okay, just to add on the utilization trends, right? We did see a sequential rebound in the utilization trends from the March quarter, strong sales and specialty products, as I said previously, to health systems and physician providers. You know, oncology clearly is the larger, but retina also contributed to that sequential improvement.

Yeah, hi, Elizabeth. It's Bob. I'll start that and then I'll hand it over to Eva. So as we've explained, there really are three phases to the value creation thesis that we have for the MSOs. One is the integration of those MSOs into Cencora. So we have significant progress on RCA, good progress on one oncology and that's working very well. So the value that Cencora can provide to those businesses we're providing. And as we've talked about, you're seeing the results of their performance. The second phase is where we will share capabilities across the platform. And the example that we've used throughout is the clinical trial space. And I would say we're still early days there and kind of that phase two of sharing capabilities on track.

We feel good about where we are, but still early days there. And then the third phase is where we will be developing new services. So the excellent capabilities that we have at Cencora from a corporate standpoint, and then also within the MSOs of RCA and one oncology where we'll build new solutions for both physicians and for pharmaceutical manufacturers. So you can think about analytics type solutions and insights that we'll be providing. But that's in the future. And then in phase three, and all of that is underpinned by the continuous addition of physicians to both platforms. And those additions come in the form of tuck-ins that will happen within either and both of the platforms. And it also happens with individual physicians joining the platform, whether they're recently out of fellowship or moving from another side of care to the community setting.

So all of that is working well. I would say we're on track. You still early days in terms of the value creation that we believe that we can create, and I'll hand it over to Eva.

Great. Thanks, Bob. And good morning to you as well, Elizabeth. As Bob said, and I said earlier, both one oncology and RCA continue to perform well, and we're very pleased with these platforms. I'll go a little deeper on one oncology. As you think about it on a 12-month basis, we continue to expect one oncology to be neutral from an adjusted earnings per share net of net of financing. I would also note, as we continue to evaluate one oncology's accounting for its UUG subsidiary as it relates to non-controlling interest, in the third quarter we determine that there should not be a non-controlling loss ad-back to net income. There was no impact to operating income from this change.

You know, it's a complex area. So looking beyond this pretty modest accounting item, overall one oncology operating income is modestly better than our initial expectations.

Yeah, thanks for the question. For fiscal quarter Q2 to Q3, really the driver of the acceleration was the underlying strength in the utilization as we called out relative to the prior quarter. I would also note as you look forward to Q4, our Q4 implied guidance also implies strong double digit growth across our reportable segments. As you think about that in the U. S. , we'll have fully left the one oncology customer loss and we'll have an easier and easier expense comp. But when excluding one oncology, we expect to see the strongest organic growth of the year at the midpoint of our guidance. So just underlying continued momentum of the business, strength and international as well.

And I'll turn it over to Bob for the 340B. Yeah.

Hey, Alan. Thanks for the questions. And I just want to reiterate what Eva was saying with the ramp is happening just as we planned. So as we talked about the second quarter, being our lowest growth quarter, which it was, and we talked about the ramp that we had in the second half of the year and got a lot of terrific questions about how we were going to do that. But as you heard, we had a lot of confidence. It was mechanical, not aspirational. And we continue to see the opportunities there. On 340B, Alan, as you know, there's recently been guidance on the 340B program test that will be out there. We're still assessing it. We, as you know, we stay very close to all things policy spend a lot of time in Washington.

So we will participate in continuing to monitor, talking to regulators and legislators about potential unintended consequences. And our focus on all these discussions is always patient access and having the most efficient access to care. Thank you for the question.

You know, I think that's a, maybe can you talk a little bit about how much of that is already being done by one oncology, you know, maybe how much of revenues or maybe some qualitative estimate of how important that is today and, you know, how mature is that as an opportunity for one oncology because, you know, is this maybe, are we still like in early innings and like, how big of an opportunity do you think that could really be? Yeah. Hey, Charles, thank you for the question. It's, I'll connect one oncology and RCA together and kind of the answer of what inning we're in, it varies depending on which part of the MSO platform that you are.

So one, as we expand the clinical trial business within the MSOs, it's an absolute driver of profitability and growth. RCA is mature in the space. So they built a significant, well respected platform that pharmaceutical manufacturers depend on when getting clinical trials done in the retina space. There is a meaningful clinical trial activity within one oncology, but there's significant opportunity for growth. So I would say to use your innings analogy, I think we're kind of in the later, products are always coming for clinical trials. So that doesn't mean that the growth slows, but the maturity of the build out is in the latter innings. In one oncology, it's in the earlier innings, which is why we have so much optimism about the opportunity, obviously the amount of innovation in the oncology space and the need for clinical trial support will only continue to grow and will be a great source of that.

And just to add, and this is true for RCA and one oncology, you know, the community oncology community, especially physicians side of care, we talk about as being the most cost-effective side of care in almost all cases, but it's also the most accessible side of care. So having meaningful clinical trial access within the community physician space means that more patients will have access to those trials, which is really important for their health care and also for the accrual of the trials, which is one of the biggest challenges that the manufacturers have. Thank you for the question.

Yeah. Hey, George, I'll take the first party question that I'll hand over to to Eva for for the second. So we are really well positioned in the specialty logistics and on 3PL space. So remembering and you know well, George, our world courier business is the highest and specialized logistics services for pharmaceutical manufacturers, primarily with with clinical trials. And we have differentiated capabilities that have been there over a long, over a long period of time. Within our 3PL business, the European part of the 3PL business came with the Alliance Healthcare acquisition. We have a US based part of that business called ICS who also have very specialized capabilities for specialty product movement. So I start with our capabilities and that leads to differentiation because George, there certainly are other players who are who are building healthcare, 3PL, logistics capabilities, very, very credible players.

We play at a higher end of those services and also find that the pharmaceutical manufacturers often prefer someone who is health pharmaceutical focused. And you know, we talk about our pharmaceutical center strategy. That also is true for our 3PL and specialty logistics. So when we're talking to pharmaceutical manufacturers, we're talking about capabilities, but also our expertise in the pharma channel, which allows us to compete very well, even though there are well known credible competitors in the space we continue to grow. And I'll hand it over to Eva.

Great. Thanks, Bob. So good morning, George, and nice to hear your voice again. Listen, we've seen good utilization trends in specialty, including oncology as part of the market that we saw consistent growth throughout Q3, and it's continued to be a long-term growth driver. As you see by our implied 4Q guidance, right, there's a sequential improvement, the US performing the strongest organic growth in the segment at the midpoint of our guidance. So we're pleased with the underlying performance and the trends we're seeing.

Kevin, thank you for that important question. So yeah, we spend a lot of time evaluating and studying all of the policy ideas that are out there and how that may or may not impact ASP risk. And where we land in all cases is that the policies that are under consideration or being tested are not intended to impact physician reimbursement.

You know, I've talked about today, we talk about often the community physician being the most accessible and the lowest cost side of care. And any policy that would negatively impact those physicians would impact their ability to care for patients and therefore decrease access for patients to those important physicians. So that's what we, when we're in Washington, those are the types of things that we talk about. And it's all about patient access and cost effectiveness within the healthcare system, which is where these community specialists really differentiate themselves. So how that plays through is you see things like in the globe demonstration project that any discounts that are paid from the manufacturer to the government actually are not going to flow through reimbursement or impact ASP.

They're going to be adjudicated in a direct payment from the manufacturer to the government. So that is recognition that, you know, the policy makers understand the risk to impacting community physician reimbursement. I think it also demonstrates the fact that they do not want to do that. And they're, therefore, testing an alternate mechanism. So Kevin, it's an important question, it's something that we spend a lot of time on. But we do feel confident that as this plays out, and, you know, as we get to 28 in particular with IRA and Part B, that, you know, the reimbursement to physicians will not be negatively impacted. Thanks for the question.

Thanks. Hi, Erin. Thanks for the question. I'll take the ASP and MSO question, and then I'll obviously head it to Eva for your question to her. So yeah, we feel confident in the long-term outlook for the community position space, and that includes, you know, reimbursement over the long term. So we do intend to continue to invest in the MSO space. I'll note that our intention is to really focus on tuck in acquisitions for RCA and the Retina Space M1 oncology in the oncology space. As it pertains to other ologies, we're very happy to service all specialty products in whatever side of care that they're intended to go, and our portfolio of services and customers allows us to do that.

But in terms of MSO investment, we intend to stay pharmaceutical-centric. So right now oncology and retina are the only two specialties that we view as pharmaceutical-centric per our assessment. And so, you know, you wouldn't see us getting into other disease states in terms of MSOs. And then I would say you never say never, right? Because there could be in the future an area where it would make sense. It would be more pharmaceutical-centric. It would be a specialty physician administered, and that is a place that we certainly would look to lead when that happens. But we don't see anything in the near term. So our focus is on, you know, a creative tuck-in acquisitions within the retina and oncology space.

Thanks for the question. I'll hand it over to Eva.

Great. Good morning. Good morning, Aaron. Thanks for the question. On the guidance question, I'll start with my philosophies on guidance. I set guidance based on a discipline, internal process, reflective of the businesses, our expectations of the business. And I'm supported by an amazing team here, Long Tenured, with deep expertise in this business. I will look to continue Cencor's long track record of delivering or exceeding expectations.

Now, moving to capital deployment priorities, overall Cencor's had a great capital allocation strategy that's honestly allowed to continue to invest in key growth initiatives while returning capital to shareholders. So, you know, our capital deployment strategy remains focused on internal investments in the business, strategic M&A, opportunistic share repurchase as we just did in the third fiscal quarter and maintaining a reasonable and growing dividend. So overall, I want to build on the framework to enhance our flexibility to invest in the business and drive shareholder value.

And Aaron, I'll just add, you know, I've mentioned in my prepared remarks how excited I am to work closely with Eva. And you just heard one of the reasons why. So our philosophies in terms of how this will go forward are very aligned, very aligned to how we've done things in the past and our performance and financial discipline has allowed us to have excellent performance and continue to implement and expand our strategy. So I'm looking forward to continuing to work with Eva to do that. Thanks for the question.

Good morning, Eric. On your health for sale, the benefit of the accounting impact, the majority of the growth in the other segment was driven by the health for sale accounting, underlying MWI delivered about 10% growth and drove the change to our outlook for the year. In terms of the GLP 1s up 25%, that was generally in line with our expectations.

Thanks. Yeah, so just you cut out there a little bit in the beginning, so I'm going to repeat the question for the benefit of everyone on the call, which is down to me as though you're asking, so the past couple quarters, after the first quarter, we've had higher than expected performance out of the international segment. What are some of the drivers within that segment? And that obviously we called out the European distribution, but Eva, you could kind of speak to some of those some of those year over year drivers in the international segment. Sure, thanks for repeating the question and Daniel, thanks for the question.

In our European business, it continued to benefit from the timing of manufacturer price increases in developing market country, consistent with previous quarters. Now, we wouldn't expect that impact in Q4 given some of the timing changes. In our specialty logistics business, I think Bob hit on this a little earlier. Both World Courier and the European 3PL businesses delivered double-digit operating income growth. In 3PL, we had strong renewals, we've been focused on growing our price pipelines, excuse me, that have supported new business wins. And in World Courier, the business saw good momentum following a challenging market in fiscal 25, and the business continues to position itself for continued growth as the market has stabilized.

Could you remind us your business, the focus on covered entities and on pharma, what you are doing in 340B and what your value prop is to various participants? Eric, thank you for the question. I would just answer that with just, we have such a broad portfolio of customers who are all providing amazing care for patients and their stakeholders. And so, if something were to go through and be implemented, there would be different impacts to different parts of the business, which we haven't really spoken to, but I wouldn't assume that that's all negative. I think there would be puts and takes potentially, and we're still obviously assessing what could be until they're sampling implemented. We wouldn't necessarily size it.

Yeah. Hey, Michael. Thanks for the question. Yeah, we are very happy with our customer portfolio, and as I just said, it's very broad. We have significant presence in really all sites of care, and our goal, as I said before, is to support patient access, and we're supporting pharmacies and physicians and other providers, wherever the patient needs care.

Sinkora will be making sure that customer has the product at the right time and at the right price. So we're happy with that, our relationships with our large customers and our small customers are good, and there's nothing to call out in terms of renewables. Thanks for the question.

Thank you. Thanks, everyone, for joining. We're proud of the strong results that we've posted today and our opportunistic repurchase of $1 billion in the quarter. Sinkora is delivering on our long-term track record of execution. We're well positioned by a robust specialty business and broad-based scale and solutions. We have confidence in our talent, our value proposition, end-to-end, and health care solutions, and our ability to continue driving long-term value for all stakeholders.

Thanks, everyone, very much.