Labcorp Q2 Earnings & Revenues Beat Estimates, Stock Up in Pre-Market

Core Insights - Labcorp Holdings reported adjusted EPS of $4.35 for Q2 2025, a 10.4% increase year-over-year, exceeding Zacks Consensus Estimate by 5.07% [1][7] - Revenues for the quarter rose 9.5% year-over-year to $3.53 billion, also surpassing Zacks Consensus Estimate by 1.14% [2][7] - The company raised its 2025 guidance for revenues, EPS, and free cash flow based on strong business performance and currency impacts [8][9] Revenue Performance - Q2 revenues increased to $3.53 billion, driven by organic growth of 5.4%, acquisitions contributing 3.5%, and a foreign currency translation gain of 0.6% [2][7] - Diagnostics Laboratories segment reported revenues of $2.75 billion, reflecting an 8.9% year-over-year improvement [3] - Biopharma Laboratory Services revenues rose 11% to $784.8 million, primarily due to organic growth of 7.8% and a foreign currency translation gain of 3.2% [4] Margin and Operating Performance - Gross margin expanded by 90 basis points to 29.7%, despite an 8.1% rise in the cost of revenues [5] - Adjusted operating income improved by 26.7% year-over-year to $466.9 million, with adjusted operating margin expanding by 179 basis points to 13.2% [5] Cash Position - Labcorp ended Q2 with cash and cash equivalents of $647.3 million, up from $369.4 million at the end of Q1 [6] - Long-term debt decreased to $5.08 billion from $5.57 billion at the end of Q1 [6] - Cumulative cash inflow from operating activities reached $620.6 million, significantly higher than $18.5 million in the year-ago period [6] Future Outlook - Updated 2025 revenue growth guidance is now projected between 7.5%-8.6%, with Diagnostics Laboratories expected to grow 7%-8% and Biopharma Laboratory Services between 6.1% and 7.5% [8] - Full-year adjusted EPS is now expected to be in the range of $16.05-$16.50, up from the previous estimate of $15.70-$16.40 [9] - Free cash flow from continued operations is projected to be between $1.13-$1.28 billion, an increase from the earlier range of $1.10-$1.25 billion [9] Strategic Developments - During the quarter, Labcorp expanded its oncology portfolio with key product launches and enhanced partnerships with hospitals and health systems [10]