Core Insights - Labcorp Holdings (LH) reported $3.56 billion in revenue for Q3 2025, marking an 8.6% year-over-year increase and an EPS of $4.18 compared to $3.50 a year ago [1] - The reported revenue aligns with the Zacks Consensus Estimate of $3.56 billion, resulting in a slight surprise of -0.01%, while the EPS exceeded the consensus estimate of $4.13 by 1.21% [1] Financial Performance Metrics - The net book-to-bill ratio was reported at 1.1%, slightly below the two-analyst average estimate of 1.2% [4] - Revenue from Biopharma Laboratory Services reached $799.1 million, surpassing the average estimate of $793.17 million, reflecting an 8.3% year-over-year increase [4] - Revenue from Diagnostics Laboratories was $2.77 billion, matching the average estimate and showing an 8.5% year-over-year growth [4] - Adjusted Operating Income for Diagnostics Laboratories was $450.4 million, exceeding the average estimate of $444.52 million [4] - Adjusted Operating Income for Biopharma Laboratory Services was $132.2 million, slightly above the average estimate of $130.39 million [4] - Unallocated corporate expenses were reported at -$69.3 million, worse than the average estimate of -$66.07 million [4] Stock Performance - Labcorp's shares have returned -2.5% over the past month, contrasting with the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance against the broader market in the near term [3]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 increased to $3.6 billion, representing a 9% growth compared to last year [6] - Adjusted EPS grew by 19% to $4.18, with strong pre-free cash flow of $281 million [6][16] - Adjusted operating income was $513 million, or 14.4% of revenue, compared to $441 million, or 13.4% of revenue last year [15][16] Business Segment Data and Key Metrics Changes - Diagnostics revenue increased by 8.5%, primarily due to strong organic growth of 6% [6][17] - Biopharma Laboratory Services (BLS) revenue increased by 8%, with a 5% growth in constant currency [6][19] - Central laboratories experienced a strong growth of 10%, or 7% in constant currency [7][19] Market Data and Key Metrics Changes - The quarterly book-to-bill ratio was 0.9, with a trailing 12-month ratio of 1.09, indicating strong demand [7][19] - The backlog for BLS was $8.6 billion, with an expected conversion of approximately $2.7 billion into revenue over the next 12 months [19] Company Strategy and Development Direction - The company aims to be the partner of choice for health systems and local laboratories, focusing on high-growth therapeutic areas and leveraging technology for operational efficiency [8][10] - Recent acquisitions include clinical laboratory assets from Empire City Laboratories and Laboratory Alliance of Central New York, enhancing the company's market presence [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver sustainable growth and long-term value for shareholders, despite challenges in early development revenue [22] - The company anticipates a $100 million impact from PAMA in 2026, with ongoing efforts to mitigate this through operational efficiencies and AI initiatives [48][68] Other Important Information - The adjusted tax rate for the quarter was 23.3%, with expectations for the full year to be approximately 23% [16] - The company invested $268 million in acquisitions and partnerships during the quarter, with total debt at $5.6 billion [16][17] Q&A Session Summary Question: Inquiry about revenue guidance and currency impact - Management clarified that $13 million of the guidance impact was from foreign exchange, with the rest related to timing of acquisitions [25][26] Question: Organic price per mix growth - Management noted that organic price mix grew by 2.8%, primarily driven by an increase in tests per session and Invitae's performance [32][34] Question: Site consolidation in early development business - Management explained that the decision was based on the timing of study starts and the need to streamline operations, expecting a slight increase in operating income from this action [39][41] Question: Expectations around PAMA - Management indicated ongoing advocacy for legislative changes to mitigate the impact of PAMA, while planning for a $100 million impact on revenue and earnings in 2026 [44][48] Question: Consumer-driven testing contributions - Management highlighted strong growth in the consumer business, with ongoing efforts to expand test offerings and improve patient engagement [52][54] Question: Diagnostic segment margin expansion - Management discussed the factors contributing to margin expansion, including Invitae's integration and operational efficiencies from the Launchpad Initiative [56][58]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 increased to $3.6 billion, representing a 9% growth compared to last year [7] - Adjusted EPS grew by 19% to $4.18, with strong pre-free cash flow of $281 million [7][16] - Adjusted operating income was $513 million, or 14.4% of revenue, compared to $441 million, or 13.4% last year [15][16] Business Segment Data and Key Metrics Changes - Diagnostics revenue increased by 8.5%, with organic growth of 6% and margin improvement of 110 basis points [7][17] - Biopharma Laboratory Services (BLS) revenue grew by 8.3%, with organic revenue up 5.3% [18] - Central laboratories experienced a strong growth of 10%, or 7% in constant currency [8][18] Market Data and Key Metrics Changes - The quarterly book-to-bill ratio was 0.9, with a trailing 12-month ratio of 1.09, indicating strong demand [8][20] - The backlog for BLS was $8.6 billion, with an expected conversion of approximately $2.7 billion into revenue over the next 12 months [20] Company Strategy and Development Direction - The company aims to be the partner of choice for health systems and regional laboratories, focusing on high-growth therapeutic areas [9] - Recent acquisitions include clinical laboratory assets from Empire City Laboratories and Laboratory Alliance of Central New York, expected to close in Q1 2026 [10] - The company is expanding in specialty areas such as oncology, women's health, neurology, and autoimmune diseases [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver sustainable growth and long-term value for shareholders [23] - The company anticipates a $100 million impact from PAMA in 2026, with ongoing efforts to mitigate this through efficiency improvements [44][47] - The outlook for 2025 includes revenue growth guidance of 7.4% to 8% and adjusted EPS guidance of $16.15 to $16.50 [22] Other Important Information - The company is investing in digital and AI capabilities to enhance operational efficiency [13][14] - The Launchpad Initiative is on track to offset typical increases in personnel costs [15] Q&A Session Summary Question: Inquiry about revenue guidance and currency impact - Management clarified that $13 million of the guidance impact was from foreign exchange, with the rest related to timing of acquisitions [26][27] Question: Organic price per mix growth - Management noted that organic price mix grew by 2.8%, primarily driven by an increase in tests per session and Invitae's performance [32][34] Question: Site consolidation in early development - Management explained that the decision was based on the timing of study starts and expected a slight increase in operating income from the restructuring [38][40] Question: Expectations around PAMA - Management indicated ongoing advocacy for legislative changes to mitigate the impact of PAMA, with a $100 million expected impact for 2026 [44][47] Question: Consumer-driven testing contributions - Management reported significant growth in consumer testing initiatives, with plans to continue expanding the test offerings [51][53] Question: Diagnostic segment margin expansion - Management highlighted a 110 basis point margin improvement in diagnostics, driven by organic demand and Invitae's integration [56][58] Question: 2025 guidance range - Management kept the guidance range wider for BLS due to uncertainties around divestitures and site consolidations [62] Question: Central lab strength and bookings - Management confirmed strong growth in central laboratories, with expectations for continued strength in the upcoming quarters [88][89]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 increased to $3.6 billion, representing a 9% growth compared to the previous year [5] - Adjusted EPS grew by 19% to $4.18, with strong pre-free cash flow of $281 million [5][16] - Adjusted operating income was $513 million, or 14.4% of revenue, compared to $441 million, or 13.4% last year [15][16] Business Segment Data and Key Metrics Changes - Diagnostics revenue increased by 8.5%, with organic growth of 6% and margin improvement of 110 basis points [5][17] - Biopharma Laboratory Services (BLS) revenue grew by 8.3%, with organic revenue up by 5.3% [19] - Central laboratories experienced a strong growth of 10%, or 7% in constant currency [6][19] Market Data and Key Metrics Changes - The quarterly book-to-bill ratio was 0.9, with a trailing 12-month ratio of 1.09, indicating strong demand [6][19] - The company is divesting or restructuring approximately $50 million of annual revenue in non-core areas due to lower than anticipated revenue in early development [6][19] Company Strategy and Development Direction - The company aims to be the partner of choice for health systems and regional laboratories, focusing on high-growth therapeutic areas and leveraging science and technology for growth [7][10] - Recent acquisitions include clinical laboratory assets from Empire City Laboratories and Laboratory Alliance of Central New York, enhancing the company's market presence [8][9] - The company is expanding in specialty areas such as oncology, women's health, neurology, and autoimmune diseases, with innovative testing capabilities introduced [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver sustainable growth and long-term value for shareholders, despite challenges in early development [23][82] - The company anticipates a $100 million impact from PAMA in 2026, with ongoing efforts to mitigate this through operational efficiencies and AI initiatives [43][63] Other Important Information - The adjusted tax rate for the quarter was 23.3%, with expectations for the full year to be around 23% [16] - The company ended the quarter with $598 million in cash and total debt of $5.6 billion, resulting in a debt leverage of 2.4 times [16] Q&A Session Summary Question: Inquiry about revenue guidance and currency impact - Management clarified that $13 million of the revenue guidance adjustment was due to foreign exchange, with the rest related to timing of acquisitions [26][27] Question: Organic price per mix growth - Management noted that organic price mix grew by 2.8%, driven by an increase in tests per session and the impact of Invitae [32][34] Question: Site consolidation in early development - Management explained that the decision was based on the timing of study starts and the need to streamline operations, expecting a slight increase in operating income from this action [37][38] Question: Expectations around PAMA - Management discussed ongoing advocacy for legislative changes to mitigate the impact of PAMA, with a $100 million expected impact on revenue and earnings for 2026 [43][44] Question: Consumer-driven testing efforts - Management highlighted strong growth in the consumer business, with new tests launched and a focus on meeting patient needs through various platforms [49][50] Question: Diagnostic segment margin expansion - Management indicated that the 110 basis point margin improvement was driven by organic demand and the integration of Invitae, with expectations for continued strength [52][54] Question: Revenue and EPS accretion from acquisitions - Management projected that acquisitions would contribute 1.5% to 2.5% growth in a given year, with a strong pipeline of opportunities [76]

Core Insights - Labcorp Holdings (LH) reported quarterly earnings of $4.18 per share, exceeding the Zacks Consensus Estimate of $4.13 per share, and up from $3.5 per share a year ago, representing an earnings surprise of +1.21% [1] - The company posted revenues of $3.56 billion for the quarter ended September 2025, slightly missing the Zacks Consensus Estimate by 0.01%, but up from $3.28 billion year-over-year [2] - Labcorp shares have increased approximately 20.2% year-to-date, outperforming the S&P 500's gain of 16.9% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $4.03 on revenues of $3.58 billion, and for the current fiscal year, it is $16.30 on revenues of $14.02 billion [7] - The estimate revisions trend for Labcorp was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Medical Services industry, to which Labcorp belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Third Quarter 2025 Supplemental Financial Information October 28, 2025 Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements, including, but not limited to, statements with respect to (i) the estimated 2025 guidance and related assumptions, (ii) the impact of various factors on operating and financial results, including the projected impact of global economic and market conditions on the company's businesses, operating results, cash flows and/or fina ...

Financial Performance - Labcorp reported third-quarter 2025 revenue of $3.56 billion, an increase of 8.6% compared to $3.28 billion in Q3 2024[4]. - Diluted EPS for Q3 2025 was $3.12, up from $2.00 in Q3 2024, while adjusted EPS rose to $4.18 from $3.50, reflecting a 19.4% increase[4]. - Revenues for Q3 2025 reached $3,563.5 million, a 8.6% increase from $3,282.0 million in Q3 2024[29]. - Gross profit for Q3 2025 was $1,025.1 million, up 13.3% from $904.4 million in Q3 2024[29]. - Operating income for the nine months ended September 30, 2025, was $1,117.1 million, a 28.4% increase compared to $870.2 million for the same period in 2024[29]. - Net earnings attributable to Labcorp Holdings Inc. for Q3 2025 were $261.1 million, representing a 54.3% increase from $169.3 million in Q3 2024[29]. - Basic earnings per share for Q3 2025 were $3.14, compared to $2.02 in Q3 2024, reflecting a 55.4% increase[29]. - Net earnings for the three months ended September 30, 2025, were $261.5 million, a 54.1% increase from $169.6 million in the same period of 2024[33]. - Revenues from Diagnostics Laboratories reached $2,769.6 million for the three months ended September 30, 2025, up 8.5% from $2,553.5 million in 2024[36]. - Adjusted operating income for the consolidated segment was $513.3 million for the three months ended September 30, 2025, compared to $441.1 million in 2024, reflecting a 16.4% increase[39]. - The adjusted operating margin improved to 14.4% for the three months ended September 30, 2025, compared to 13.4% in the same period of 2024[39]. - Adjusted net income for the nine months ended September 30, 2025, was $1,038.3 million, up from $939.9 million in 2024, indicating a 10.5% increase[39]. Cash Flow and Investments - Labcorp's operating cash flow for Q3 2025 was $387.2 million, compared to $277.3 million in Q3 2024, indicating strong cash generation[10]. - Net cash provided by operating activities was $387.2 million for the three months ended September 30, 2025, compared to $277.3 million in 2024, representing a 39.7% increase[33]. - Capital expenditures for the three months ended September 30, 2025, were $106.7 million, a decrease from $115.8 million in the same period of 2024[33]. - The company reported a net cash used for investing activities of $374.0 million for the three months ended September 30, 2025, compared to $579.1 million in 2024[33]. Guidance and Future Outlook - The company updated its full-year revenue guidance to a growth range of 7.4% to 8.0%, with the midpoint lowered by 40 basis points due to currency and acquisition timing[4]. - Free cash flow for the year is now projected to be between $1.17 billion and $1.29 billion, with the midpoint raised by $25 million[4]. - The company anticipates future growth opportunities through strategic acquisitions and partnerships, although specific financial guidance for 2025 remains subject to various uncertainties[24][25]. Debt and Financial Health - Labcorp's total debt at the end of the quarter was $5.58 billion, with cash and cash equivalents of $598 million[11]. - Total assets as of September 30, 2025, were $18,261.6 million, slightly down from $18,379.0 million at the end of 2024[31]. - Total liabilities decreased to $9,548.6 million from $10,312.5 million at the end of 2024, indicating improved financial health[31]. - Cash and cash equivalents decreased to $598.1 million from $1,518.7 million at the end of 2024, highlighting a significant reduction in liquidity[31]. Strategic Initiatives - Labcorp signed several strategic agreements with health systems and regional laboratories, enhancing its partnerships in the healthcare sector[5]. - The company advanced its oncology and genetic testing portfolio, including the expansion of OmniSeq® INSIGHT and the introduction of new Alzheimer's tests[6]. - The backlog for Biopharma Laboratory Services increased by 5.4% year-over-year, with a total backlog of $8.58 billion[15]. Workforce and Operations - Labcorp's workforce consists of nearly 70,000 employees serving clients in approximately 100 countries, supporting 75% of new drugs approved by the FDA in 2024[23].

Core Insights - Labcorp raised its annual profit forecast and exceeded estimates in the third quarter due to strong demand for its diagnostic tests [1] Company Performance - The laboratory operator reported better-than-expected results for the third quarter, indicating robust performance in its diagnostic testing segment [1] Financial Outlook - Labcorp's adjustment of its annual profit forecast suggests confidence in continued demand and operational efficiency moving forward [1]

Core Insights - Labcorp reported strong third-quarter results for 2025, with significant revenue growth and margin improvement driven by its Diagnostics and Central Laboratory businesses [2][3] - The company updated its full-year guidance, reflecting a revenue growth expectation of 7.4% to 8.0% and an adjusted EPS range of $16.15 to $16.50 [6][17] Financial Performance - Total revenue for Q3 2025 was $3.56 billion, an increase of 8.6% from $3.28 billion in Q3 2024 [5][6] - Adjusted EPS rose to $4.18 from $3.50 year-over-year, marking a growth of 19.4% [5][6] - Operating income for Q3 2025 was $396.6 million, compared to $254.1 million in Q3 2024, with an operating margin of 11.1% [5][6] Strategic Developments - Labcorp formed new partnerships with health systems and regional laboratories, enhancing its position as a preferred partner [3][6] - The company signed agreements to acquire assets from Empire City Laboratories and Laboratory Alliance of Central New York, further expanding its capabilities in oncology and clinical testing [7][6] Cash Flow and Capital Allocation - Operating cash flow for Q3 2025 was $387.2 million, up from $277.3 million in Q3 2024 [9] - Free cash flow increased to $280.5 million from $161.5 million year-over-year, primarily driven by higher cash earnings [9][6] - The company repurchased $25 million of common stock and declared a quarterly cash dividend of $0.72 per share [4][6] Guidance and Outlook - The updated full-year guidance includes a revenue growth expectation of 7.4% to 8.0% and an adjusted EPS range of $16.15 to $16.50 [6][17] - Free cash flow guidance was raised to a range of $1.17 billion to $1.29 billion, with the midpoint increased by $25 million [6][17]

Company Performance - Labcorp Holdings (LH) has seen a stock increase of 4.3% over the past month, reaching a new 52-week high of $291.78, and has gained 26.9% since the start of the year, outperforming the Zacks Medical sector's 1.7% gain and the Zacks Medical Services industry's 16.2% return [1] - The company has a strong record of positive earnings surprises, beating the Zacks Consensus Estimate in each of the last four quarters, with the latest EPS reported at $4.35 against a consensus estimate of $4.14 [2] - For the current fiscal year, Labcorp is expected to post earnings of $16.3 per share on revenues of $14.01 billion, reflecting an 11.87% change in EPS and a 7.68% change in revenues [3] Valuation Metrics - Labcorp's current valuation metrics indicate a trading multiple of 17.9X current fiscal year EPS estimates, which is above the peer industry average of 16.9X, and a trailing cash flow basis of 13X compared to the peer group's average of 10.6X [7] - The stock has a PEG ratio of 1.86, which does not place it in the top echelon from a value perspective [7] Zacks Rank and Style Scores - Labcorp holds a Zacks Rank of 2 (Buy) due to favorable earnings estimate revisions from analysts, which is a positive indicator for potential future gains [8] - The company has a Value Score of B, a Growth Score of B, and a Momentum Score of C, resulting in a combined VGM Score of A, suggesting it meets the criteria for strong investment potential [6][9] Industry Comparison - In comparison to industry peers, CVS Health Corporation (CVS) also shows strong performance with a Zacks Rank of 2 (Buy) and a Value Score of A, indicating it is a viable competitor in the market [10] - CVS Health Corporation reported earnings that beat consensus estimates by 23.13%, with expected earnings of $6.36 per share on revenues of $392.28 billion for the current fiscal year [11]