McKesson Corp. announced Thursday double-digit gains in revenue in its just-completed 2025 fiscal year and fourth quarter and said it plans to sell off another business unit as it focuses on its core business of selling pharmaceuticals and healthcare products to U.S. pharmacies and medical practices.
Revenue for the fiscal year ended March 31 increased 16.2%, led by a 17.6% increase in the U.S. Pharmaceutical segment that accounted for nearly 92% of company’s full-year revenue. For the quarter, company revenue grew 18.9% and the U.S. Pharmaceutical unit 20.9%.
The company said growth in the U.S. Pharmaceutical business over the past year was driven by “increased prescription volumes from retail national customers and growth in the distribution of specialty products, including higher volumes in oncology.”
In an earnings call with analysts following Thursday’s earnings release, McKesson CEO Brian Tyler said the company planned to spin off its Medical-Surgical Solutions unit, which distributes medical supplies and equipment and accounted for 3.2% of revenue in the 2025 fiscal year.
McKesson sold its Rexall and Well.ca businesses in Canada last year and Tyler said Thursday the company is seeking to sell its Norway operation, the last remaining business it owns in Europe. McKesson agreed to sell most of its European businesses in 2021.
Company officials have said McKesson is redeploying capital to areas where it sees the greatest opportunity for return on investment, particularly in oncology and biopharmaceuticals.
Tyler also announced McKesson expected to complete next month its $2.49 billion purchase of a 70% ownership stake in Core Ventures, which provides administrative and advisory services to oncology practices at nearly 100 locations in Florida. The company last month completed its $850 million acquisition of an 80% interest in Prism Vision Holdings LLC, which provides services to ophthalmologists and retinal specialists. The physicians who had owned Prism retain a 20% stake.
Both Core Ventures and Prism will be incorporated into the company’s U.S. Pharmaceutical division. Those two acquisitions will account for six to seven percentage points of the fiscal 2026 projected growth of 12-16% for that unit, Tyler said.
‘More moving parts’
Company officials downplayed rumored cuts in Medicare reimbursement, which could reduce payments to pharmaceutical distributors like McKesson, reports which helped drive down the price of pharmaceutical stocks this week. Tyler said the community-based medical providers McKesson serves offer accessible, low-cost care and always have been “fairly compensated” for their services.
“And we have successfully illustrated over the years, our ability to get paid fair value for the services that we provide,” he added. “And that would be our expectation in this case as well.”
As for tariffs, Tyler said McKesson has diversified its supplier base and is not overly reliant on any single country that might be hit with high duties. Tariffs are particularly an issue for generic drugs, which are largely imported from such countries as India, China and Israel and account for 91% of U.S. prescriptions, according to the U.S. Food and Drug Administration.
Overall, Tyler said, “The external environment today is probably, there’s more moving parts than typically we would see. But if you step back further, healthcare is a pretty resilient industry. The underlying core fundamentals continue to support growth, and we think the innovation will continue in the pharmaceutical segment, and we’ll be positioned to benefit from that.”
McKesson’s stock was up almost 5% in early trading Friday while the broader market was in negative territory.
McKesson’s market capitalization of more than $87 billion makes it the No. 1 distributor in stock market value in the Distribution Strategy Group Public Distributor Index, a ranking of publicly held distributors. McKesson’s stock price is up about 22% year to date, while the Public Distributor Index overall is down 0.4%.
McKesson’s fiscal 2025 and Q4 highlights
For its 2025 fiscal year ended March 31, McKesson reported:
- Total revenue of $359.05 billion, up 16.2% from $308.95 billion in fiscal 2024.
- U.S. Pharmaceutical unit revenue of $327.72 billion, a 17.6% increase from $278.74 billion in the prior year.
- Net income of $3.48 billion, an increase of 10.2% from $3.16 billion last year.
For the fourth quarter of fiscal 2025, McKesson reported:
- Total revenue of $90.82 billion, an increase of 18.9% from $76.37 billion in Q4 of fiscal 2024.
- Revenue for its U.S. Pharmaceutical unit increased 20.9% to $83.17 billion from $68.79 billion.
- Net income totaled $1.31 billion, up 57.3% from $830 million last year.
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Don Davis, former editor-in-chief of Internet Retailer magazine and Vertical Web Media, is a freelance writer based in Chicago. His experience in retail and distribution goes back to his childhood when he worked in the toy wholesale business founded by his father and two uncles and in their discount department stores located throughout the New York metropolitan area.