# Patterson Companies Inc. (PDCO) — Financial Analysis

**Exchange:** NASDAQ  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/PDCO/thesis · /stocks/PDCO/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: PDCO
step: "04"
title: Financial Snapshot — 3-Year P&L Summary
created: 2026-05-29
---

### Step 04: Financial Snapshot

#### Income Statement Summary (FY2022–FY2024)

All figures in USD millions except per-share data.

| Metric | FY2022 | FY2023 | FY2024 |
|--------|--------|--------|--------|
| **Revenue** | $6,498 | $6,534 | $6,444 |
| Revenue Growth | +10.7% | +0.5% | -1.4% |
| **Gross Profit** | $1,207 | $1,208 | $1,194 |
| Gross Margin | 18.6% | 18.5% | 18.5% |
| **SG&A** | $893 | $925 | $921 |
| SG&A as % of Revenue | 13.7% | 14.2% | 14.3% |
| **Operating Income (GAAP)** | $314 | $283 | $273 |
| Operating Margin | 4.8% | 4.3% | 4.2% |
| **Adjusted Operating Income*** | ~$355 | ~$320 | ~$310 |
| Adjusted EBITDA* | ~$430 | ~$395 | ~$390 |
| Adjusted EBITDA Margin | ~6.6% | ~6.0% | ~6.1% |
| **Interest Expense** | ($48) | ($52) | ($54) |
| **Pre-tax Income** | $266 | $231 | $219 |
| **Tax Rate (effective)** | ~27% | ~27% | ~27% |
| **Net Income (GAAP)** | $194 | $169 | $160 |
| Net Margin | 3.0% | 2.6% | 2.5% |
| **Adjusted Net Income*** | ~$240 | ~$210 | ~$200 |
| **Diluted Shares (millions)** | 93.5 | 91.2 | 88.8 |
| **GAAP EPS (diluted)** | $2.07 | $1.85 | $1.80 |
| **Adjusted EPS (diluted)*** | ~$2.57 | ~$2.30 | ~$2.25 |
| **DPS (dividends per share)** | $1.04 | $1.04 | $1.04 |

*Adjusted figures exclude amortization of acquisition intangibles, restructuring charges, and other one-time items. Company reports non-GAAP adjusted EPS as primary earnings metric.

#### Gross Margin Analysis

Patterson's gross margin has been remarkably stable at ~18.4–18.6% over recent years. This stability reflects:

1. **Mix shift offsetting pricing pressure**: Higher-margin consumables and technology/services partially offsetting lower-margin equipment growth
2. **Animal Health dilution**: Animal Health gross margins (~14–15%) are significantly below Dental (~22–23%), and Animal Health is growing faster — creating structural gross margin pressure
3. **Pricing power**: Inflation pass-through in consumables has supported gross margin stability despite input cost pressure

**Segment Gross Margins (estimated):**

| Segment | Gross Margin | Notes |
|---------|-------------|-------|
| Dental | ~22–23% | Software/services higher; equipment lower |
| Animal Health | ~14–15% | Commoditized pharma distribution; low-margin production animal drag |
| Consolidated | ~18.5% | Blended |

#### Operating Expense Trend

SG&A has been rising as a % of revenue (13.7% → 14.3%) despite cost efficiency initiatives. Drivers:
- Sales force investments in DSO capabilities
- Technology infrastructure (Fuse development, ecommerce)
- Headcount to support Animal Health growth
- Inflationary wage pressure on ~7,000+ employee base

Management targets SG&A leverage over time but has not yet demonstrated it in recent periods.

#### EBITDA Detail

| Component | FY2022 | FY2023 | FY2024 |
|-----------|--------|--------|--------|
| Operating Income (GAAP) | $314 | $283 | $273 |
| + D&A | ~$85 | ~$88 | ~$90 |
| **EBITDA** | ~$399 | ~$371 | ~$363 |
| + Stock comp | ~$25 | ~$25 | ~$25 |
| + Restructuring/other | ~$8 | ~$8 | ~$10 |
| **Adjusted EBITDA** | ~$432 | ~$404 | ~$398 |

#### Earnings Per Share Bridge

EPS has declined from $2.07 (FY2022) to $1.80 (FY2024) on a GAAP basis, despite share buybacks reducing the diluted share count from 93.5M to 88.8M. The ~5% reduction in share count provided roughly $0.10 of EPS support, meaning underlying earnings declined more than headline EPS suggests.

Adjusted EPS (~$2.25 in FY2024) provides a cleaner picture of operating performance, though management's add-backs (primarily amortization of ~$40M annually from prior acquisitions) are legitimate and should continue declining as older acquisition intangibles amortize off.

#### Profitability vs. Peers

| Company | Revenue | Gross Margin | EBITDA Margin | P/E |
|---------|---------|-------------|---------------|-----|
| Patterson (PDCO) | $6.4B | 18.5% | ~6.1% | ~12x adj. |
| Henry Schein (HSIC) | ~$13B | ~21% | ~8–9% | ~15–16x adj. |
| McKesson (MCK) | ~$300B | ~4–5% | ~1.5% | ~20x |

Patterson trades at a meaningful discount to HSIC on EBITDA margin (reflecting less software/services content and more commoditized Animal Health mix) and on P/E multiple (reflecting share loss narrative).

#### Key Financial Concerns

1. **Revenue contraction in FY2024**: First year of negative revenue growth in 5+ years; reflects dental structural issues
2. **Margin pressure**: Operating margin declining from 4.8% (FY2022) to 4.2% (FY2024) as revenue base shrinks
3. **EPS trajectory**: GAAP EPS declining despite buybacks; consensus expects modest improvement in FY2025 but uncertainty is high
4. **Dividend sustainability**: $1.04/share dividend costs ~$92M/year; free cash flow (~$250–300M) comfortably covers this but if earnings deteriorate further, dividend coverage becomes a concern

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/PDCO/fundamental

## Navigation

- Overview: /stocks/PDCO
- Financials (this page): /stocks/PDCO/financials
- Thesis: /stocks/PDCO/thesis
- Investment Memo: /stocks/PDCO/memo
- Coverage universe: /stocks