Syncora at Morgan Stanley Conference: Strong Growth Amid Challenges

On Wednesday, 10 September 2025, Syncora Inc (NYSE:COR) presented at the Morgan Stanley 23rd Annual Global Healthcare Conference. The company highlighted robust growth in the U.S. healthcare segment, driven by specialty product sales, while acknowledging challenges in international operations. Syncora has raised its fiscal year 2025 EPS guidance five times, demonstrating confidence in its strategic direction.

Key Takeaways

• Syncora raised its fiscal year 2025 EPS guidance five times, projecting 15% to 16% growth in adjusted operating income.
• The U.S. segment is expected to grow by 20% to 21%, fueled by strong utilization trends and specialty product sales.
• The RCA acquisition is performing well, but Syncora faces a challenge with the loss of an oncology customer.
• Long-term guidance includes 5% to 8% organic operating income growth, with additional growth from capital deployment.
• The company is focusing on high-growth areas such as oncology, retina MSOs, and digital transformation.

Financial Results

• Fiscal Year 2025 EPS Guidance: Raised five times
• Adjusted Operating Income Growth Guidance (FY25): 15% to 16%
• U.S. Segment Operating Income Growth Guidance (FY25): 20% to 21%
• Long-Term Organic Operating Income Growth Guidance: 5% to 8%
• Capital Deployment Contribution to EPS Growth: 3% to 4%
• Long-Term EPS Growth Guidance: 8% to 12%
• Animal Health Business Growth (most recent quarter): 7%
• Animal Health Business average Growth: 6%

Operational Updates

• RCA Acquisition: Performing well financially and strategically, with higher growth and margins. The clinical trial site business is exceeding expectations.
• One Oncology: Syncora has a strategic investment in the oncology MSO space, with a put-call structure for potential full ownership between June 2026 and June 2028. Syncora currently owns 35%.
• Biosimilars: These continue to act as a tailwind in the specialty business, initially in oncology and now in retina.
• International Business: Facing challenges due to subdued clinical trial activity, but the core distribution business is performing adequately with 10% top-line growth.

Future Outlook

• Fiscal Year 2026 Guidance: To be provided in November with anticipated benefits from the RCA acquisition and challenges from the loss of an oncology customer.
• Long-Term Growth: Syncora is confident in achieving 5% to 8% organic operating income growth and 8% to 12% EPS growth.
• Capital Deployment: A balanced approach involving CapEx, strategic acquisitions, share repurchases, and dividend growth.
• Growth-Oriented Investments: Focus on businesses with high long-term growth potential.

Q&A Highlights

• Over 95% of brand buy-side profit dollars are from fee-for-service arrangements.
• Drug Pricing: Moderation of generic deflation continues, with branded pricing in line with expectations.
• MSO Strategy: Focus on pharmaceutical-centric specialties like oncology and retina.
• Regulatory Dynamics: Monitoring potential changes in drug pricing and the impact of the Inflation Reduction Act.
• Walgreens and Boots Relationship: Strong contracts extending through 2029 and 2031, respectively.
• Digital Transformation: Aiming to shift focus from reporting to partnering, implementing AI in internal audits.

Readers are invited to refer to the full transcript for a more detailed account of Syncora’s strategic insights and financial performance.

Full transcript - Morgan Stanley 23rd Annual Global Healthcare Conference:

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Hi. Good afternoon, everyone. Welcome to day three of the Morgan Stanley Healthcare Conference. Just real quickly, for important disclosures, please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. And if you do have any questions, please reach out to your Morgan Stanley sales representative.

With that, I’m Erin Wright, cover health care services at Morgan Stanley. We’re we’re happy to have Syncora with us today. With the team, we have Jim Cleary, EVP and CFO of the company. We also have Bennett Murphy, who heads up the IR effort, so SVP of IR, our Head of IR and Enterprise Productivity at Syncora. So thanks so much for joining us today.

We’re definitely happy to have you. So, I’ll kick it off with some some q and a to get it started here. More recently, in the most recent quarter, you raised your fiscal twenty five EPS guidance. I think you’ve raised it five times since you issued it in November, with the latest kind of implying that EPS growth of 14 to 14 to 15%. The EPS growth this year is helped in part by some of the acquisitions and and, like, for instance, the RCA deal, but also related to significant strength in that U.

S. Health care business. So could you talk a little bit about how you continue to track ahead of your long term goals here of 8% to 12%? How we should be thinking about that earnings growth as we head into 2026? And what are some of those key headwinds and tailwinds?

Jim Cleary, EVP and CFO, Syncora: Sure. Well, first of all, Aaron, thank you so much for having us here at the Morgan Stanley conference. We really appreciate it. We’ve had great investor meetings today. And thanks for all the work that you do on Syncora and our industry.

So you’re absolutely right. We have been fortunate, and we’ve increased our guidance for fiscal year ’twenty five 5x since the start of the fiscal year. And you referenced our EPS and, of course, our adjusted operating income, our guidance is 15% to 16% growth for the fiscal year. And in our U. S.

Segment, which is performing particularly strongly, our operating income guidance is growth of 20% to 21% for the fiscal year. And that’s really been driven by the things that we’ve been talking about for quite some time. We’ve seen very good utilization trends. We’ve had particularly strong performance in sales of specialty products to physician practices and health systems. And we’ve really just seen very broad based, strong performance across our U.

S. Segment and particularly in some of our largest businesses in The U. S. Segment. As we look forward to fiscal year twenty twenty six, of course, we’ll provide guidance for fiscal year twenty twenty six in November when we announce our fourth quarter results.

And you asked about some of the puts and takes. There’s just a couple of things that I’ll call out, and there’s really nothing new here. It’s things that we’ve talked about before. Of course, we benefited in fiscal year twenty twenty five from the RCA acquisition, and we closed that acquisition at the beginning of our second quarter fiscal year twenty twenty five. So that will be a tailwind for us during the 2026.

And then, of course, something that we’ve also called out in the past, and that is, we do have the loss of an oncology customer, where the MSO was purchased by one of our competitors. And that starts to be a headwind in the 2025. So it will be a headwind in the ’26. But I’ll go back to the fact that we just have had very strong performance in our U. S.

Business, again, by the things that we’ve talked about for a while, the utilization trends and the strength in specialty. But this is one thing that we said on our last earnings call is we don’t expect our level of outperformance going forward to be as strong as the level of outperformance that we’ve had. And that’s not based on anything in particular, beyond what I’ve talked about just now. It’s just probably more of law of large numbers more than anything else. But I’ll also say we do have a very high degree of confidence in our long term guidance of about 5% to 8% organic operating income growth, another 3% to 4% from capital deployment, so 8% to 12% EPS growth.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Okay. And then to now help us bridge to your long term growth of 5% to 8% kind of organic, can you talk a little bit about what underpins that, bridge that to kind of what you’re seeing now? And quarterly conference call potentially be a platform to to talk about kind of the long term growth trajectory and how something structurally changed across this industry and maybe some upward pressure on that.

Jim Cleary, EVP and CFO, Syncora: Yes, sure. Karen, as I said, we do have a high degree of confidence in the long term guide. And of course, I’ll also say that we have been outperforming that for quite some time now that’s driven by the things that we’ve talked about today and talked about in the recent past. We certainly have been helped by the RCA acquisition also, which is performing well. And as you asked about, long term guidance is something that we’re always evaluating and we’re continuing to evaluate.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Okay. So let’s go to just core utilization trends then. And they’ve obviously been relatively strong. You talked about that. What can continue here?

What is normalized? And maybe this isn’t normal in terms of utilization trends, but anything you can call out in terms of the nature of the volume utilization trends that you’re seeing?

Jim Cleary, EVP and CFO, Syncora: Yes. Couple of things. And it is something that we’ve been seeing for quite some time now, and, it’s something which has been, you know, particularly strong in specialty. And, you know, we have, you know, strong specialty business across our entire business, whether it be physician practices or health systems or retail pharmacy or mail order pharmacy. It’s really strong across our business, but particularly impactful for us in physician practices and health systems where we have a number of wraparound services that we also offer.

And we’ve continued to see those trends be quite good, and then, you know, talked about that on our most recent quarterly call.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Okay. Great. And then, drug pricing environment, I guess, can you speak to anything new or different in terms of the generic drug pricing environment, branded drug pricing environment? Obviously, it’s more of a fee for service type of contracting on branded side, but any nuance is fair to speak to.

Jim Cleary, EVP and CFO, Syncora: Yes. It’s really the same things that we’ve talked about for a while now. On the generic front, the moderation of generic deflation that we’ve been talking about remains. On the branded pricing front, it’s really continued to be, in line with our expectations. And so, in terms of kind of the pricing dynamic, there’s nothing new that I would call out, Erin.

Okay.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: I think one of the bright spots here oh, we do have a question from the audience.

Unidentified speaker: The core distribution business, what portion of revenue is linked to a fee for service contract versus a almost like a a margin contract

Bennett Murphy, SVP of IR, Head of IR and Enterprise Productivity, Syncora: Yeah. With that mix. Yeah. So if you look at our brand buy side profit dollars, well over 95% of those of those dollars are coming through a fee per service type arrangement. It’s something that has been a strategic focus for us and and the most people have manufactured over the last five to ten years, maybe even longer, and we’ve seen that number continue to creep north of that 95%.

Unidentified speaker: Those prices are cut 50%. You don’t care because it’s volume arrangement.

Jim Cleary, EVP and CFO, Syncora: No. So let me, comment on that. We, have, you know, a high degree of confidence in our, kind of the efficiency of our business and our, kind of the gross profit that we charge. Given our volumes and our investment in infrastructure and technology, we’re a very efficient business. And so whenever there is a reduction in the price of a product, we have the ability to renegotiate the contracts.

And we just have feel that we’re just such an efficient operator that our gross profit structure is highly justified and highly defensible. Thank you for the question.

Bennett Murphy, SVP of IR, Head of IR and Enterprise Productivity, Syncora: Thank

Erin Wright, Healthcare Services Analyst, Morgan Stanley: you. Just to switch gears a little bit to specialty. So so can you provide, I guess, a little bit of update on the specialty business? It’s clearly been, like I was saying before, a bright spot for you. Can you talk about the gross margin profile of that business as well as kind of you are a market leader?

Can you speak to what’s feasible in terms of your opportunity to increase your exposure around your specialty business over time?

Jim Cleary, EVP and CFO, Syncora: Sure. That has been just such an important business for us and continues, to be an important business for us. And it’s where we’ve been investing a lot of capital also with our acquisition of the RCA MSO and our investment in the One Oncology MSO. And it’s been a market space that really has been growing very nicely, and where we’ve been a market leader for quite some time. And it’s particularly, as I said earlier, impactful for us in the Part D space and our sales of specialty products for physician practices and health systems.

And it’s an area where, we are, strong in distribution, of course. We’re also strong in wraparound services like our leading GPOs in that market. And then now we’ve also been investing in MSOs. And so we’re increasingly providing higher value services to this very strong and important customer group, that we’ve been working with for decades. And so it’s, you know, wonderful when we’re able to, work with, doctors and practices for such a long period of time and increasingly provide higher value services.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Great. And so on that front, you recently closed your RCA acquisition. Can you talk a bit a little bit about what surprised you thus far, like anything in terms of to call out in terms of integration across that business, your expectations in terms of accretion, and, and and some of, you know, the key strengths in terms of how that fits into into ThinkWell.

Jim Cleary, EVP and CFO, Syncora: Sure. I would say that we’re very pleased with the RCA acquisition, and we’re pleased with it from a financial standpoint, from a strategic standpoint, and from a cultural standpoint. And it’s, it’s performed, quite well from a financial standpoint. From a strategic standpoint, I would say it’s a higher growth, higher margin than our distribution business, of course. And it’s and we think it’s exactly the sort of business, where we want to prioritize and deploy capital because it just fits so well with our specialty focus.

And then from a cultural standpoint, it’s going along quite well. And I’ll just kind of give examples. We’ve had, a lot of the kind of their bigger internal meetings that they’ve had, we’ve hosted in our headquarters. And it’s just so great to have an opportunity to spend time with the, management team and the doctors of RCA. And I would say one of the things that’s probably exceeded my expectations is their, clinical trial site business.

They’re leading sites for clinical trials that the, retina manufacturers are, working on. And, one of the interesting things is, when, a lot of their doctors were having meetings in our office recently, I had a chance to talk to a number of the younger doctors who had, recently joined, and they indicated one of the reasons that they had joined RCA was not only to, practice medicine, but also to participate in clinical trials also. And so it it’s it’s really not just a a nice part of the business. It’s also a, great tool to help with the organic growth and the recruiting of top young doctors.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: That’s great. So I’ll I’ll speak to the next one now on OneOncology in terms of can you discuss performance there since since since the deal? And and and can you talk about the oncology market versus other areas of specialty, some of the nuances there? And can you describe kind of the rationale behind the one oncology relationship with TPT?

Jim Cleary, EVP and CFO, Syncora: Yeah. Sure. So, let me start by saying that, when you see Senkora kind of focus on a business or make an investment, everything that we do at Senkora is pharmaceutical centric. And so, I say that because as you look at our investments in MSOs, where we’ve really invested in the two product categories or the two parts of the market that are most pharmaceutical centric in MSOs, oncology and retina. And so that’s kind of the strategic rationale for entering, those, two very important, platforms, for us.

And of course, oncology has been the largest and fastest growing part of our specialty business for quite some time. Again, a lot of the key doctors at One Oncology, we’ve had decades long relationship with their practices. And so it’s really was kind of the natural evolution of our specialty business. And you asked about the relationship with TPG. We presently own 35 of One Oncology and made the investment with a private equity firm and with the doctors.

And we have a put call, structure that, you know, we’re, likely, to own all of the business. And under the put call structure, that, you know, could be, between, you know, June ’26 and June ’28.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: K. Great. And then, can we talk a little bit about sort of pricing dynamics again, a little bit on MSN and and most favorite dates? Do you think that, you know, how do you think about the implications about, you know, potential changes there from an MSO perspective and then across your kind of core distribution business?

Bennett Murphy, SVP of IR, Head of IR and Enterprise Productivity, Syncora: I think it’s what’s critical is that the that there’s no desire to go after the the independent community provider. And, clearly, there isn’t a governmental focus on relative pricing with the from The US to to other developed world countries. But as we continue to engage in in DC as we’ve done for decade plus on the importance of of political constituents understanding the potential unintended consequences of changes and how they could impact the community provider setting. We have very good relationships and understanding there, and and it’s been a valuable relationship both ways to really help inform some approaches to understanding and digesting potential policy changes.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: So what could you do to offset, I guess, any sort of, you know, potential cut to, you know, your your reimbursement an ASP plus six? Like, what if, you know, things change in terms of the provider fees or other

Bennett Murphy, SVP of IR, Head of IR and Enterprise Productivity, Syncora: Yeah. So I think I mean, it this is a topic that’s come up off and on for years. And the way that kind of always approach it is whatever the what if there is a change, the key is that the provider is made whole and that there isn’t some some some hole to fill. And that whatever the mechanism is, whatever the change is, the key is to to to keep the provider whole.

Jim Cleary, EVP and CFO, Syncora: Okay.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: And then let’s talk a little bit about biosimilars opportunity across your broader business, but how it plays a role potentially in some of these MSR deals that you’re doing, you know, RCA being a leading kind of prescriber of EYLEA, for instance? Like, how does this all kind of how does this all incorporate across the different components of your business on the distribution side?

Bennett Murphy, SVP of IR, Head of IR and Enterprise Productivity, Syncora: Yeah. I think, you know, what St. Cora has done is taken a very strategic approach to where we think it makes sense for us to own MSOs, and that is the pharmaceutical centric specialties. We have customers across all across all specialties, across all ologies. But in terms of where we think it makes strategic sense for us, you know, the oncology and the retina space are particularly strong from a pharmaceutical orientation in terms of the way that carriers typically deliver and where most of the MSO profitability comes to derive from.

So those are the strategic focuses for us, and we think that that’s where there’s a lot of opportunity and align incentives in the long term for us.

Jim Cleary, EVP and CFO, Syncora: And then the one thing that I’ll add is that biosimilars have really been a tailwind for us in the specialty business for quite some time and continue to be one. And it was first initially in oncology and now in retina also.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Great. And then we were recently or we recently had a discussion today, actually, with one of your your partners and and Cigna. And we talked a little bit about CureScript. They’ve highlighted CureScript as well, but you obviously still have a strong relationship with them and and and partnership with them. Can you talk a little bit about, you know, how much, I guess, in terms of do you see a risk in terms of Cigna taking on more of that business in house at this point?

Bennett Murphy, SVP of IR, Head of IR and Enterprise Productivity, Syncora: So what I would say is, you know, Cigna bought that care system for this ten to fifteen years ago, this dynamic has been there throughout. They’re a good a good partner for us in the mail order pharmacy channel. The dynamics that are called that have been talked about when a product moves from brand to generic or innovative or non innovative, the those dynamics have been there throughout. I think they’re in greater focus now given that HUMIRA is such a large product for the mail order channel. But it’s not a it’s not a new none of it is really a new dynamic for us.

It’s just a continuation of how that how that has worked commercially, and we navigate that partnership.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Alright. That that sounds good. Can you talk a little bit about okay. Other another partner that you have, Walgreens. Can you speak to kind of the nature of the relationship with Walgreens now?

Do you anticipate any sort of changes in that relationship with any sort of well, with the official changing control?

Jim Cleary, EVP and CFO, Syncora: Sure. Well, we have a contract with Walgreens through 2029, and we have a contract with Boots through 2031. Of course, now those contracts are with two different companies, Walgreens and Boots. And we have a very strong and highly integrated relationship with Walgreens and Boots. Given the amount of distribution that we do with Walgreens and Boots, our operations between the companies is, as I said, you know, very highly integrated.

And it’s our relationship that is, very important to us and and is strong. Thank you.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Okay. And then other contracts that might be coming up for renewal, anything you should to aware of? Yeah. There’s nothing that we’ve called out.

Jim Cleary, EVP and CFO, Syncora: And really, frankly, the only thing we called out is, of course, the, oncology, customer where the MSO was acquired by one of our competitors. But other than that, there’s nothing on the new, contract, front that we’re calling out at this time.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: And then, I wanna switch back to kind of regulatory dynamics too in terms of know, potential pharma tariffs as well

Jim Cleary, EVP and CFO, Syncora: as

Erin Wright, Healthcare Services Analyst, Morgan Stanley: IRA impacts, some of these DTC initiatives. I think most of that’s for, like, smaller cash pay businesses. So can you talk about, you know, what’s on your radar screen on that front? What are you paying attention to and what could be more meaningful in terms of positives or negatives from a regulatory standpoint?

Bennett Murphy, SVP of IR, Head of IR and Enterprise Productivity, Syncora: Yeah. And you helped us out by answering the question as you went, which is always very helpful. But I think that you’re right. I mean, as you think about DTC, if you look at the language, if you look at the discussions, it’s really a focus on on addressing parts of the market that are underserved, whether it’s cash pay or it’s parts of the market that, you know, for certain products, they, you know, they may not have a primary care physician and they’re trying to manufacturers trying to address the fill that gap with telehealth partnerships that have

Erin Wright, Healthcare Services Analyst, Morgan Stanley: a knock

Bennett Murphy, SVP of IR, Head of IR and Enterprise Productivity, Syncora: on relationship with a digital pharmacy that’s been typically supported by a distributor. As you think about tariffs, you have nothing new to call out there to kind of continue to watch and monitor. And do you think about what we focus on most primarily is just the the stability of supply, not having any disruptions along those lines. And I think we’ve we’ve done a a good job of that, and we’ve stayed close to our partners to make sure that we have good visibility into their pipelines and their and their ability to support and and really navigate any potential change that comes.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: And what about IRA and and sort of utilize are you seeing any closer in terms of utilization trends, behavior trends in terms of party redesign or implications from a drug pricing perspective on an IRA? I I think it’s different in terms of the structure and nature of those that contracting, but if you could describe that, that’d be great.

Bennett Murphy, SVP of IR, Head of IR and Enterprise Productivity, Syncora: Yeah. And it’s not it’s really not something that we see so much directly impacting the parts of the business the parts of the business that we talk about frequently, like the the specialty distribution and the health systems and and the physician customers. Where you most likely see it directly is in the payers part of the world where they control a lot of TDMs in the mail or pharmacy. And and certainly, they’ve they’ve talked a lot about that. And and the fact that, you know, some of the out of pocket caps have have made people use more of those types of drugs.

But it’s really part b as in dog type phenomena phenomena. And it’s happening in parallel to to to to to going about somewhere. So there’s not as much, you know, top line visibility into it from where we sit. But, certainly, the the payers have more directed focus on that part of the business.

Jim Cleary, EVP and CFO, Syncora: And and so it probably is one of the several things that is impacting the utilization trends.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: And a somewhat selfish question here, but I do have to ask on animal health, if that’s okay. So can you speak on recent trends across the animal health sector in terms of demand trends, companion animal versus livestock? Are you seeing some of the innovation that’s coming through? And we’ve heard from a lot of the animal health companies at this conference alone, you know, really stepping up from an innovation standpoint. How is that flowing through to you in terms of new opportunities in categories like dermatology and categories that, you know, you didn’t have access to before?

Jim Cleary, EVP and CFO, Syncora: Yeah. Thank you for asking the question. And I’ll, talk a little bit about our Animal Health business. It’s really been performing quite well. The most recent quarter, it grew at 7%, and it’s kind of been averaging around a 6% growth rate.

So it is definitely outperforming the distribution market and gaining market share. And one of the reasons is, just like throughout Senkora, we lead with market leaders, and we have a lot of the leading animal health providers as customers. And our Companion Animal business is growing faster than our Production Animal business. Both are growing. And we, I would say, overall, the market has been good, but it has been a little soft for a period of time.

And I think that it still has some of those challenges in both the companion animal market and the production animal market. But our performance continues to be quite good, and we are really excited by the innovation because, of course, what’s really going to continue to drive that business over the long term is the human pet bond and then the really strong innovation that we see from manufacturers also. Thank you, Erin.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Great. Great. So I wanna switch gears, though, to the international part of business now. Let’s take a higher level approach in terms of some of the key moving pieces because I think that’s important here in terms of how we’re thinking about kind of even near term as well as longer term dynamics there. But can you talk about what’s influencing AOI growth currently across the international segment?

What gets us back to that recovery in the fourth quarter? Yes.

Jim Cleary, EVP and CFO, Syncora: Yes. Thanks. Thank you for asking that question. And of course, at Senscor this year, we’ve really been outperforming in The U. S.

Business with our guidance is 20% to 21% adjusted operating income growth, but we’ve had an adjusted operating income decline in the international business. And it’s really been driven by our global specialty logistics business, which is a leader in doing logistics for clinical trials, and our global consulting services business. And both of them have been impacted by subdued levels of clinical trials. There are some green shoots and some data in the last couple of months that perhaps that’s improving from a market standpoint I’m talking now. And so that’s a business which we do expect to stabilize.

And one of the reasons, we expect it to stabilize is that the comps become easier for that segment now and then also some of the signs we are perhaps starting to see in the market. And the one final thing I’ll say is to put it into perspective is that at Senkora, 85% of our, operating income is in The U. S. Segment, 15% of our operating income is in the international segment. But of course, we are very focused on the turnaround in the international business.

I will say that the distribution business, the core distribution business there is is fine. And for instance, in the most recent quarter, our top line growth was 10%, but we had a decline in operating income, which is, of course, driven by the manufacturer services businesses that I talked about.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Okay. Can you talk go into a little bit more detail on World Courier too, just exactly what you’re seeing? We’ve obviously seen some some volatility across CRO clinical trial activity. What what’s your outlook on kind of fundamental demand trends, like, the funding environment, that kind stuff on in terms of the key drivers across the world?

Jim Cleary, EVP and CFO, Syncora: Yes. Thank you for asking that follow-up question, Aaron. World Courier has been an excellent business for us for a decade plus. And as I said, it’s a leader in doing logistics for clinical trials. It has had a weak year for the reason that we both just talked about now, but it’s a business that we have a lot of confidence in for the long term and always like to have businesses that are market leaders and markets that we believe will return to good growth over the long term.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: In Pharmalex, what’s your current view in terms of the business and the pharma services market more broadly? What’s more to do on this front? And you talked about it being, I guess, 15% of earnings for you. Like, does that does the portion of is that an area that you want to build upon? And what do you think the proportion of your business is gonna be in international longer term?

Jim Cleary, EVP and CFO, Syncora: Yes. Thanks. So, our global consulting services business, as I said earlier, has underperformed, And, it’s really kind of driven by, what we’ve just talked about, the subdued levels of clinical trials. It’s something that, you know, we’re very focused on the turnaround there. But I’ll also say kind of one thing I’d like to add is that Bob Mach, our CEO, he’s coming up on his one year anniversary as CEO.

And of course, he was COO before being CEO, and has run basically all the businesses at Senkora at one time or another and joined the company in 2007 when he sold his MarketAxess consulting business to Senkora. He’s really established four strategic drivers. And one of the four strategic drivers that Bob has established is prioritizing growth oriented investments. And I think this gets to the question that you were just asking. And so what that means is we’re being very intentional as we look across our portfolio is, which of our businesses have the best long term growth potential, and that’s where we’re really prioritizing our investment dollars, Aaron.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: I think I asked the question on the last conference call because you kind of mentioned the word deemphasizing. But is there anything that are are you taking a a a hard look at all different parts of your business to understand kind of what areas that, you know, you know, may not be a part of kind of Syncora longer term?

Jim Cleary, EVP and CFO, Syncora: Yeah. I’ll just say that that, you know, we are being very intentional in looking across our portfolio, and we’ll be prioritizing our growth oriented investments.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: That’s fair. Okay. So sort of along those lines, like, kind of opposite of the capital deployment, can you talk a little bit about the priorities here, M and A environment, update on sort of what the pipeline looks like? Is there enough MSO deals to do out there or focus on deleveraging too?

Jim Cleary, EVP and CFO, Syncora: Yes, sure. So one of the great things about Centcora and our industry is we have strong free cash flow. And so capital deployment is a very important part of our business model, and we’ll continue to have balanced capital deployment. We’ll continue to invest in the business through CapEx, and our CapEx is has been increasing. And the reason why it’s been increasing is because the volumes have been so strong in our business.

We’ve been making investments in infrastructure because of the higher volumes that we’ve seen, and we’re also investing in key technologies. And digital transformation is one of Bob’s other strategic drivers. And so we’re investing in the business with CapEx. We’ll continue to do strategic acquisitions. A lot of that is spoken for and that we have the put call on the other 65% of One Oncology.

And then we think our MSOs will have over time good bolt on opportunities also. We’ll continue, to do opportunistic share repurchases, and then we’ll, grow the dividend over time also. And we most recently, grew the dividend at an 8% rate to make sure that it was in that, 8% to 12%, long term guide that we have for EPS growth.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: You mentioned investments in technology. Perspective.

Jim Cleary, EVP and CFO, Syncora: Sure. And so, as I said, digital transformation is one of kind of the four strategic drivers that we’re focused on, and, we’re doing it across the business. And I’ll just kind of talk about some of the things that we’re doing in the finance area. Like, right now in finance, and I’ll use general numbers here. In the FP and A area, we spend about 80% of our time generating reports and 20% of our time partnering with the business.

And we really want to flip that through digital transformation. So we spend 20% of our time generating reports and 80% of the time partnering with the business to grow the business. And I’ll just use one specific example in finance. In internal audit, which is an area which is, of course, data rich, we are increasingly, using AI in our internal audits. And this year, we’ve committed to make at least one of our internal audits done completely through a AI.

And, of course, they’ll always be reviewed by the, you know, the professionals and leaders in the department, but it’s just one of the many examples. Okay.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: That’s great. That’s good to hear those examples. And thank you so much for the time. I appreciate the discussion.

Jim Cleary, EVP and CFO, Syncora: Thank you,

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Aaron.

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