Labcorp(US:LH)2025-10-31 16:06Revenue Growth - For the three months ended September 30, 2025, the Company's revenues were $3,563.5 million, an increase of 8.6% from $3,282.0 million for the corresponding period in 2024[115]. - The increase in revenues for the three months ended September 30, 2025, was due to organic revenue growth of 6.2%, acquisitions net of divestitures contributing 1.7%, and favorable foreign currency translation of 0.7%[115]. - For the nine months ended September 30, 2025, the Company's revenues were $10,435.9 million, an increase of 7.8% from $9,679.5 million for the corresponding period in 2024[116]. - The increase in revenues for the nine months ended September 30, 2025, was attributed to organic revenue growth of 4.6%, acquisitions net of divestitures of 3.0%, and favorable foreign currency translation of 0.3%[116]. Segment Performance - Diagnostic (Dx) revenues for the three months ended September 30, 2025, were $2,769.6 million, an increase of 8.5% over $2,553.5 million in the third quarter of 2024[121]. - The increase in Dx revenues was primarily due to organic revenue growth of 6.3% and acquisitions net of divestitures contributing 2.2%[121]. - BLS revenues for the three months ended September 30, 2025, were $799.1 million, an increase of 8.3% over $737.7 million in the third quarter of 2024[122]. - The increase in BLS revenues was due to organic growth of 5.3% and favorable foreign currency translation of 3.0%[122]. - Dx revenues for the nine months ended September 30, 2025, increased by 7.8% to $8,148.0 million, driven by organic revenue growth of 4.1% and acquisitions contributing 3.8%[138]. Expenses and Income - Cost of revenues increased by 6.8% to $2,538.4 million for the three months ended September 30, 2025, compared to $2,377.6 million in 2024, with the percentage of revenues decreasing to 71.2% from 72.4%[123]. - Selling, general, and administrative expenses decreased by 2.9% to $552.4 million for the three months ended September 30, 2025, from $568.6 million in 2024, with the percentage of revenues decreasing to 15.5% from 17.3%[124]. - Total operating income for the three months ended September 30, 2025, was $396.6 million, a 56.1% increase from $254.1 million in 2024[133]. - Dx segment operating income increased by 16.3% to $450.4 million for the three months ended September 30, 2025, compared to $387.4 million in 2024[133]. - BLS segment operating income rose by 9.4% to $132.2 million for the three months ended September 30, 2025, from $120.9 million in 2024[134]. - Operating income increased by 28.4% to $1,117.1 million for the nine months ended September 30, 2025, compared to $870.2 million in 2024[152]. Interest and Taxation - Interest expense increased by 10.9% to $56.0 million for the three months ended September 30, 2025, compared to $50.4 million in 2024[129]. - Provision for income taxes increased by 83.9% to $75.5 million for the three months ended September 30, 2025, from $41.0 million in 2024, with the effective tax rate rising to 22.4% from 19.5%[132]. - Interest expense increased by 16.7% to $169.1 million for the nine months ended September 30, 2025, compared to $144.9 million in 2024, primarily due to higher interest rates and increased total debt[148]. Cash Flow and Investments - Cash provided by operating activities rose to $1,026.3 million for the nine months ended September 30, 2025, up from $808.6 million in 2024, reflecting higher earnings[159]. - Net cash used for investing activities decreased to $(804.1) million in 2025 from $(1,157.2) million in 2024, primarily due to reduced business acquisitions and lower capital expenditures[160]. - Capital expenditures were $310.6 million for the nine months ended September 30, 2025, representing 3.0% of revenues, focused on growth projects and facility updates[161]. - Net cash used for financing activities was $(1,166.6) million for the nine months ended September 30, 2025, compared to net cash provided of $1,326.6 million in 2024, driven by decreased proceeds from senior note offerings[162]. Foreign Currency and Risk Management - Approximately 13.5% of the Company's revenues for the nine months ended September 30, 2025, were denominated in currencies other than the U.S. dollar[178]. - A hypothetical change of 10% in average exchange rates would have impacted income before income taxes by approximately $23.9 million for the nine months ended September 30, 2025[178]. - The Company limits foreign currency transaction risk through exchange rate fluctuation provisions in contracts or hedging with foreign currency forward contracts[179]. - The Company had 13 open foreign exchange forward contracts with a notional value totaling approximately $311.2 million as of September 30, 2025[179]. - The Company is party to USD to Swiss Franc cross-currency swap agreements with an aggregate notional amount of $1,200.0 million[180]. - The Company entered into fixed-to-variable interest rate swap agreements for the 2.70% senior notes due 2031 with an aggregate notional value of $500.0 million[183]. - Borrowings under the Company's term loan credit facilities are subject to variable interest rates unless fixed through interest rate swaps[182]. - The Company attempts to manage interest rate risk through an appropriate mix of fixed and variable rate debt[181].