Share-Based Compensation

3 Months Ended

Sep. 30, 2025

Share-Based Payment Arrangement [Abstract]

13. Share-Based Compensation

We maintain Cardinal Health, Inc. corporate stock incentive plans (collectively, the “Plans”) for the benefit of certain of our officers, directors, and employees. As of September 30, 2025, we have 15 million shares authorized for issuance under the Plans. Upon vesting these units convert to common shares without restrictions or future service requirements.

The following table provides total share-based compensation expense by type of award:


	Three Months Ended September 30,
(in millions)	2025		2024
Restricted share unit expense	$	18	$	19

Performance share unit expense	12		11
Total share-based compensation	$	30	$	30

The total tax benefit related to share-based compensation was $4 million for both the three months ended September 30, 2025 and 2024. Share-based compensation expense is included in selling, general, and administrative expenses in the condensed consolidated statements of earnings. Our condensed consolidated statements of cash flows present our share-based compensation expense as a reconciling adjustment between net income and net cash provided by operating activities for all periods presented.

Restricted Share Units

Restricted share units granted under the Plans generally vest in equal annual installments over three years. Restricted share units accrue cash dividend equivalents that are payable upon vesting of the awards.

The following table summarizes all transactions related to restricted share units under the Plans:


(in millions, except per share amounts)	Restricted Share Units	Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2025	1.4	$	86.30
Granted	0.5	149.63
Vested	(0.7)	88.51
Canceled and forfeited	—	—
Nonvested at September 30, 2025	1.2	$	119.11

The total fair value of units vested during both the three months ended September 30, 2025 and 2024 were $53 million.

At September 30, 2025, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted share units not yet recognized was $110 million, which is expected to be recognized over a weighted-average period of two years.

Performance Share Units

Performance share units vest over a three-year performance period based on achievement of specific performance goals. Based on the extent to which the targets are achieved and our total shareholder return relative to the S&P 500 Health Care Index, vested shares may range from zero to 240 percent of the target award amount. Performance share units accrue cash dividend equivalents that are payable upon vesting of the awards.

The following table summarizes all transactions related to performance share units under the Plans (based on target award amounts):


(in millions, except per share amounts)	Performance Share Units	Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2025	1.5	$	99.45
Granted	0.3	153.66
Vested	(0.6)	92.71
Canceled and forfeited	—	—
Nonvested at September 30, 2025	1.2	$	115.79

The total fair value of units vested during the three months ended September 30, 2025 and 2024 were $108 million and $45 million, respectively.

At September 30, 2025, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $59 million, which is expected to be recognized over a weighted-average period of two years if the performance goals are achieved.

Specialty Alliance Share-Based Compensation

Specialty Alliance, a majority-owned subsidiary of Cardinal Health, maintains standalone share-based compensation plans. Share-based compensation expense associated with these awards of $63 million was recognized during the three months ended September 30, 2025, of which $61 million is included in acquisition-related cash and share-based compensation costs and $2 million is included in selling, general, and administrative expenses in the condensed consolidated statements of earnings. The liability and associated future expenses may vary based on the changes in the estimated fair value.

The following table summarizes the fair market value of the Specialty Alliance Units as of September 30, 2025:


(in millions, except per share amounts)	Specialty Alliance Share Units	Fair Value per Share
Nonvested at June 30, 2025	206	$	1.54
Granted	28	1.54
Vested	(35)	1.54
Canceled and forfeited	(1)	1.54
Nonvested at September 30, 2025	199	$	1.56
Vested at September 30, 2025	585	$	1.56

The total fair value of the Specialty Alliance Units vested during the three months ended September 30, 2025 was $53 million. During the three months ended September 30, 2025, we recognized an increase in the fair value of the liability, resulting in expense of $10 million, related to the vested Specialty Alliance Units, which is recognized in acquisition-related cash and share-based compensation costs.

At September 30, 2025, the total pre-tax compensation cost related to nonvested Specialty Alliance Units not yet recognized

was $310 million, which is expected to be recognized over a weighted-average period of approximately one year.