Labcorp — Q3 2026 Earnings Summary

Financial Performance:

• Total revenue for the three months ended September 30, 2026, was $3.81 billion, up 6.9% year-over-year compared to $3.56 billion in Q3 2025.
• Organic revenue growth was 5.5% for the quarter, driven by volume (4.8%) and price/mix (1.7%).
• Diluted EPS was $3.22 for the quarter, up 3.3% from $3.12 in Q3 2025.
• Adjusted EPS was $4.78 for the quarter, up 14.5% from $4.18 in Q3 2025.
• Operating income was $402.1 million for the quarter, compared to $396.6 million in Q3 2025; operating margin was 10.6% versus 11.1% in the prior year period.
• Adjusted Operating Income (AOI) was $570.0 million for the quarter, up from $513.3 million in Q3 2025; AOI margin was 15.0% versus 14.4% in the prior year period.
• Net earnings attributable to Labcorp Holdings Inc. were $262.8 million for the quarter, compared to $261.1 million in Q3 2025.
• Operating cash flow was $563.8 million for the quarter, up from $387.2 million in Q3 2025.
• Free cash flow was $412.2 million for the quarter, up from $280.5 million in Q3 2025.
• Capital expenditures were $151.6 million for the quarter.
• Total debt was $5.85 billion as of September 30, 2026.
• Cash and cash equivalents were $261.8 million as of September 30, 2026.

Guidance and Future Outlook:

• Raised full-year 2026 enterprise revenue growth guidance to a range of 5.9% to 6.7% (midpoint increased by 50 basis points).
• Raised full-year 2026 adjusted EPS guidance to a range of $18.30 to $18.70 (midpoint increased by 18 cents).
• Updated 2026 enterprise revenue guidance to $14.779 billion to $14.887 billion.
• Updated 2026 Diagnostics Laboratories revenue guidance to $11.475 billion to $11.551 billion.
• Updated 2026 Biopharma Laboratory Services revenue guidance to $3.328 billion to $3.358 billion.
• Free cash flow guidance remains unchanged at $1.24 billion to $1.36 billion for 2026.
• Management expects acquisitions to be accretive to adjusted EPS in year one and return cost of capital by year three.

Business Segments and Product Lines:

• Diagnostics Laboratories: Revenue was $2.95 billion for the quarter, up 6.5% year-over-year. Organic growth was 4.4%. Adjusted Operating Income was $491.6 million with a margin of 16.7%.
• Biopharma Laboratory Services: Revenue was $866.7 million for the quarter, up 8.5% year-over-year. Organic growth was 9.6%. Adjusted Operating Income was $159.0 million with a margin of 18.3%.
• Specialty Testing: Received FDA approval for PGDx elio® tissue complete CDx as a companion diagnostic for advanced melanoma.
• Alzheimer's Disease: Subsequent to the quarter, launched the FDA-cleared Elecsys® pTau-217 blood test.
• Hepatitis D: Announced the availability of a new hepatitis D reflex testing option.
• Bladder Cancer: Announced a collaboration with the Knight Cancer Institute to evaluate Plasma Detect® Genome MRD Ultra for disease recurrence in muscle-invasive bladder cancer.
• HPV Testing: Announced a collaboration with Waters Corporation to offer the FDA-approved BD Onclarity™ HPV assay across clinician- and self-collected screening options.
• Labcorp OnDemand: Expanded the test menu with the Advanced Health Panel and Marker by Labcorp™ Genetic Health Panel; the portfolio now includes over 140 panels.
• Labcorp OnDemand: Launched the Thrive 5 Health Test in collaboration with Thrive Global.
• Technology: Announced enhancements to Labcorp Global Trial Connect™, including new capabilities for Labcorp Sponsor™ and Labcorp Investigator™ portals.

Market and Competitive Landscape:

• Labcorp supported more than 85% of new drugs and therapeutic products approved by the FDA in 2025.
• The company performed more than 750 million tests for patients globally.
• Biopharma segment metrics as of September 30, 2026, include TTM Net Orders of $3.59 billion, a TTM Book to Bill of 1.10, and a Backlog of $8.92 billion (up 3.9% year-over-year).
• Next Twelve Months Forecast Backlog Conversion is $2.82 billion.

Risks and Challenges:

• Forward-looking statements are subject to risks including failure to receive tax-free treatment for the spin-off of the former Clinical Development and Commercialization Services business.
• Risks include personnel costs, employee relations, and retention difficulties.
• Potential impacts from changes in payer regulations, government policies, and testing guidelines.
• Risks related to global geopolitical events, inflation, and exchange rate fluctuations.
• Risks associated with the development, implementation, or failure of new technologies and IT systems.
• Risks related to litigation, adverse weather conditions, and the number of revenue days in a financial period.

Management Commentary and Tone:

• Adam Schechter, Chairman and CEO, stated the company delivered "another strong quarter with 7% revenue growth, continued margin expansion and 14.5% adjusted EPS growth."
• Management highlighted leadership in specialty testing through new test launches and strategic acquisitions.
• The tone indicates confidence in capitalizing on trends in personalized medicine, science, technology, and evolving consumer expectations.
• Management emphasized a disciplined allocation of capital to drive sustainable long-term growth.

Other Key Points:

• Acquisitions: Announced or closed four transactions during the quarter, including the acquisition of MLM Medical Labs.
• Pending Acquisitions: Subsequent to the quarter, signed agreements to acquire select assets of BioReference Health's laboratory testing businesses, Myriad Genetics' Prenatal Health testing business, and Millennium Health.
• Capital Allocation: Invested $255.5 million in acquisitions during the quarter.
• Dividends: Paid $58.2 million in dividends during the quarter; announced a quarterly cash dividend of $0.72 per share payable on December 11, 2026.
• Share Repurchases: The company has $1.4 billion remaining under its board-authorized share repurchase program.
• Partnerships: Partnered with the National Association of Community Health Centers to strengthen leadership development and community health initiatives.