QUEST DIAGNOSTICS INC
For the period ended Jun 30, 2025. Filed Jul 23, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 23, 2025
DGX$255.63+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-04-23.
0001022079-25-000120
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-23.
0001022079-25-000175
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 106 previous paragraphs and 139 current paragraphs.
57 unchanged; 40 reworded; 35 added; 8 removed; 1 previous and 7 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (35)
Current report
Second Quarter Highlights
Current report
Outlook and Trends
Current report
In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. The OBBBA and other possible legislation is expected to impact healthcare providers in the United States, including us, primarily through changes to Medicaid and the Affordable Care Act (“ACA”). These changes could lead to reduced funding, increased regulatory burdens and potential shifts in patient populations among payer types and utilization. Additional federal and state guidance is expected to be issued in order to implement the various provisions of the OBBBA, many of which have effective dates in 2027 and 2028. In addition, if Congress does not act to extend the enhanced Premium Tax Credits (“PTC”) that were part of the Inflation Reduction Act of 2022, which have helped drive an increase in Individual Public Exchange enrollment, they will expire at the end of 2025 and could also have an impact on patient populations and result in shifts among payer types and utilization.
Current report
Revenues generated under Medicaid and managed Medicaid programs, and through the ACA related Exchange Plans, represented approximately 8% and less than 5%, respectively, of consolidated revenues for 2024. Based on the provisions of the new legislation (including various effective dates), we currently believe that the OBBBA, and expiration of the enhanced PTCs, are not likely to have a material impact on our consolidated revenues for 2025 and 2026. In addition, we currently estimate that for 2026 through 2028 the OBBBA and the planned expiration of the enhanced PTCs at the end of 2025 could reduce our consolidated revenues by up to 50-60 basis points by 2028, compared to 2025, primarily reflecting the impact on our ACA related Exchange Plans revenues.
Current report
While the impacts outlined above represent our current estimates, we continue to assess the impact of the OBBBA and the planned expiration of the enhanced PTCs on our outlook for the remainder of 2025 through 2028.
Current report
The OBBBA also makes permanent key elements of the Tax Cuts and Jobs Act of 2017, including 100% bonus depreciation, domestic research cost expensing and the business interest expense limitation, among other tax changes. Many of the tax provisions of the OBBBA are designed to accelerate tax deductions, which could lead to lower cash tax payments. The new legislation has multiple effective dates, with certain provisions effective in 2025 and others in the future. While we continue to assess the impact of the tax provisions of the OBBBA on our consolidated financial statements, we currently believe that the tax provisions of the legislation are not expected to have a material impact on our statement of operations.
Current report
For additional discussion regarding regulatory trends and uncertainties, and the risk factors that could cause actual results to differ materially from those described above, see Part I, Item 1, “Business – The Clinical Testing Industry,” and “Business – Regulation”, Part I, Item 1A, “Risk Factors” and the “Outlook and Trends” section of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2024 Annual Report on Form 10-K.
Current report
Results for the three months ended June 30, 2025 were affected by certain items that on a net basis decreased diluted earnings per share by $0.15 as follows:
Current report
•pre-tax charges of $28 million, recorded in other operating (income) expense, net, or $0.19 per diluted share, primarily representing a $24 million impairment charge on certain long-lived assets related to the potential exit of a business, and, to a lesser extent, losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; and
Current report
•pre-tax charges of $7 million ($1 million recorded in cost of services and $6 million recorded in selling, general and administrative expenses), or $0.04 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business; partially offset by
Current report
•a pre-tax gain of $46 million, recorded in other operating (income) expense, net, or $0.30 per diluted share, from a payroll tax credit under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") associated with the retention of employees;
Current report
•pre-tax gains of $2 million ($1 million recorded in other income, net and $1 million recorded in equity in earnings of equity method investees, net of taxes), or $0.01 per diluted share, representing net gains associated with changes in the carrying value of our strategic investments; and
Current report
Results for the six months ended June 30, 2025 were affected by certain items that on a net basis decreased diluted earnings per share by $0.42 as follows:
Current report
•pre-tax amortization expense of $78 million recorded in amortization of intangible assets, or $0.51 per diluted share;
Current report
•pre-tax charges of $30 million, recorded in other operating (income) expense, net, or $0.21 per diluted share, primarily representing a $24 million impairment charge on certain long-lived assets related to the potential exit of a business, and, to a lesser extent, losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; and
Current report
•pre-tax charges of $26 million ($7 million recorded in cost of services and $19 million recorded in selling, general and administrative expenses), or $0.17 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business; partially offset by
Current report
•pre-tax gains of $2 million ($1 million recorded in other income, net and $1 million recorded in equity in earnings of equity method investees, net of taxes), or $0.01 per diluted share, representing net gains associated with changes in the carrying value of our strategic investments; and
Current report
•$12 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.10 per diluted share.
Current report
•pre-tax charges of $10 million ($1 million recorded in cost of services and $9 million recorded in selling, general and administrative expenses), or $0.06 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business;
Current report
•pre-tax charges of $9 million recorded in equity in earnings of equity method investees, net of taxes, or $0.05 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments; and
Current report
•$1 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.01 per diluted share.
Current report
Results for the six months ended June 30, 2024 were affected by certain items that on a net basis decreased diluted earnings per share by $0.64 as follows:
Current report
•pre-tax amortization expense of $58 million recorded in amortization of intangible assets, or $0.39 per diluted share;
Current report
•pre-tax charges of $9 million recorded in equity in earnings of equity method investees, net of taxes, or $0.05 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments; partially offset by
Current report
Net revenues for the three months ended June 30, 2025 increased by 15.2% compared to the prior year period. For the three months ended June 30, 2025, organic growth was 5.2% compared to the prior year period.
Current report
DIS revenues for the three months ended June 30, 2025 increased by 15.7% compared to the prior year period. For the three months ended June 30, 2025:
Current report
•Total revenue per requisition was down 0.4% versus the prior year period, driven primarily by the impact of the LifeLabs acquisition, which carries a lower revenue per requisition. On an organic basis, revenue per requisition was up 3.3% in the quarter versus the prior year period driven primarily by an increase in the number of tests per requisition and test mix.
Current report
Net revenues for the six months ended June 30, 2025 increased by 13.7% compared to the prior year period. For the six months ended June 30, 2025, organic growth was 3.8% compared to the prior year period.
Current report
DIS revenues for the six months ended June 30, 2025 increased by 14.2% compared to the prior year period. For the six months ended June 30, 2025:
Current report
Other Operating (Income) Expense, Net
Current report
For both the three and six months ended June 30, 2025, other operating (income) expense, net includes a $46 million gain from a payroll tax credit under the CARES Act associated with the retention of employees. Additionally, during the three and six months ended June 30, 2025, we recorded an impairment charge of $24 million on certain long-lived assets related to the potential exit of a business. Also, both periods include losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions.
Current report
Other Income, Net
Current report
Income tax expense for the six months ended June 30, 2025 and 2024 was $156 million and $140 million, respectively.
Current report
Equity in earnings of equity method investees, net of taxes, increased by $9 million for the three months ended June 30, 2025, compared to the prior year period, primarily due to the three months ended June 30, 2024 including $9 million of net losses associated with changes in the carrying value of our strategic investments.
Current report
We have $500 million of 3.45% senior notes due June 2026.
Removed paragraphs (8)
Previous report
First Quarter Highlights
Previous report
Results for the three months ended March 31, 2025 were affected by certain items that on a net basis decreased diluted earnings per share by $0.27 as follows:
Previous report
•$9 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.08 per diluted share.
Previous report
•pre-tax charges of $17 million ($13 million recorded in cost of services and $4 million recorded in selling, general and administrative expenses), or $0.12 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business; and
Previous report
Net revenues for the three months ended March 31, 2025 increased by 12.1% compared to the prior year period.
Previous report
DIS revenues for the three months ended March 31, 2025 increased by 12.7% compared to the prior year period.
Previous report
Other Operating Expense, Net
Previous report
Other (Expense) Income, Net
Reworded paragraphs (40)
Previous wording
Quest Diagnostics works across the healthcare ecosystem to create a healthier world, one life at a time. Our diagnostic information services ("DIS") business provides diagnostic insights from the results of our laboratory testing to empower people, physicians, and organizations to take action to improve health outcomes. Derived from one of the world's largest databases of de-identifiable clinical lab results, our diagnostic insights reveal new avenues to identify and treat disease, inspire healthy behaviors and improve healthcare management. In the right hands and with the right context, our diagnostic insights can inspire actions that transform lives and create a healthier world. We provide services to a broad range of customers within our primary customer channels - physicians (including those associated with accountable care organizations and Federally Qualified Health Centers), hospitals, and patients and consumers. Our other customers include health plans, employers, emerging retail healthcare providers, government agencies, pharmaceutical companies and other commercial clinical laboratories. We offer broad access to clinical testing through a nationwide network of laboratories, patient service centers, phlebotomists in physician offices, and our connectivity resources, including call centers and mobile phlebotomists, nurses and other health and wellness professionals. Our large in-house staff of medical and scientific experts, including medical directors, scientific directors, genetic counselors and board-certified geneticists, provide medical and scientific consultation to healthcare providers and patients regarding our tests and test results, and help them best utilize our services to improve outcomes and enhance satisfaction. Our DIS business makes up greater than 95% of our consolidated net revenues.
Current wording
Quest Diagnostics works across the healthcare ecosystem to create a healthier world, one life at a time. Our diagnostic information services ("DIS") business provides diagnostic insights from the results of our laboratory testing to empower people, physicians, and organizations to take action to improve health outcomes. Derived from one of the world's largest databases of de-identifiable clinical lab results, our diagnostic insights reveal new avenues to identify and treat disease, inspire healthy behaviors and improve healthcare management. In the right hands and with the right context, our diagnostic insights can inspire actions that transform lives and create a healthier world. We provide services to a broad range of customers within our primary customer channels - physicians (including those associated with accountable care organizations and Federally Qualified Health Centers), hospitals, and patients and consumers. Our other customers include health plans, employers, emerging retail healthcare providers, government agencies, pharmaceutical companies and other commercial clinical laboratories. We offer broad access to clinical testing through a nationwide network of laboratories, patient service centers, phlebotomists in physician offices, and our connectivity resources, including call centers and mobile phlebotomists, nurses and other health and wellness professionals. Our large in-house staff of medical and scientific experts, including medical directors, scientific directors, genetic counselors and board-certified geneticists, provide medical and scientific consultation to healthcare providers and patients regarding our tests and test results, and help them best utilize our services to improve outcomes and enhance satisfaction. Our DIS business makes up greater than 97% of our consolidated net revenues.
Previous wording
For the three months ended March 31, 2025, we incurred $19 million of pre-tax charges in connection with restructuring and integration activities, including $11 million of employee separation costs, with the remainder including integration costs. Most of the charges will result in cash expenditures. Additional restructuring and integration charges may be incurred in future periods, including as we identify additional opportunities to achieve further savings and productivity improvements.
Current wording
For the six months ended June 30, 2025, we incurred $26 million of pre-tax charges in connection with restructuring and integration activities, including $12 million of employee separation costs, with the remainder including integration costs. Most of the charges will result in cash expenditures. Additional restructuring and integration charges may be incurred in future periods, including as we identify additional opportunities to achieve further savings and productivity improvements.
Previous wording
•pre-tax amortization expense of $39 million recorded in amortization of intangible assets, or $0.26 per diluted share;
Current wording
•pre-tax amortization expense of $39 million recorded in amortization of intangible assets, or $0.25 per diluted share;
Previous wording
•$2 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.02 per diluted share.
Current wording
•$3 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.02 per diluted share.
Previous wording
•pre-tax gains of $8 million, recorded in equity in earnings of equity method investees, net of taxes, or $0.06 per diluted share, principally consisting of a non-recurring gain related to a lease; and
Current wording
•pre-tax gains of $54 million ($46 million recorded in other operating (income) expense, net and $8 million recorded in equity in earnings of equity method investees, net of taxes), or $0.36 per diluted share, from a $46 million payroll tax credit under the CARES Act associated with the retention of employees and, to a lesser extent, an $8 million non-recurring gain related to a lease;
Previous wording
•pre-tax charges of $3 million, recorded in other operating expense, net, or $0.03 per diluted share, representing a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; partially offset by
Current wording
•pre-tax charges of $4 million ($1 million recorded in selling, general and administrative expenses and $3 million recorded in other operating (income) expense, net), or $0.03 per diluted share, primarily representing a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; partially offset by
Previous wording
•pre-tax charges of $19 million ($6 million recorded in cost of services and $13 million recorded in selling, general and administrative expenses), or $0.13 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business; and
Current wording
•pre-tax charges of $27 million ($14 million recorded in cost of services and $13 million recorded in selling, general and administrative expenses), or $0.17 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business;
Previous wording
•pre-tax charges of $2 million, recorded in other operating expense, net, or $0.02 per diluted share, primarily representing a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; partially offset by
Current wording
•pre-tax charges of $7 million ($1 million recorded in selling, general and administrative expenses and $6 million recorded in other operating (income) expense, net), or $0.06 per diluted share, primarily representing a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; and
Previous wording
•The increase in DIS revenues compared to the prior year period was driven primarily by the impact of recent acquisitions and, to a lesser extent, organic growth. For the three months ended March 31, 2025, recent acquisitions contributed approximately 10.0% to DIS revenues.
Current wording
•The increase in DIS revenues compared to the prior year period was driven primarily by the impact of recent acquisitions and, to a lesser extent, organic growth. For the three months ended June 30, 2025, recent acquisitions contributed approximately 10.3% to DIS revenues.
Previous wording
•DIS volume increased by 12.4% compared to the prior year period driven by the impact of recent acquisitions, which contributed approximately 13.3% to DIS volume, with organic volume down by 0.9%. During the quarter, weather and one less day versus the prior year reduced volume growth by approximately 1.6%.
Current wording
•DIS volume increased by 16.3% compared to the prior year period driven by the impact of recent acquisitions, which contributed approximately 14.2% to DIS volume, with organic volume up by 2.1%.
Previous wording
DS revenues for the three months ended March 31, 2025 decreased by 7.7% compared to the prior year period principally due to lower revenues associated with our risk assessment services offered to insurers.
Current wording
DS revenues for the three months ended June 30, 2025 decreased by 3.1% compared to the prior year period principally due to lower revenues associated with our risk assessment services offered to insurers.
Previous wording
•Revenue per requisition increased by 0.3% compared to the prior year period principally due to an increase in the number of tests per requisition, substantially offset by the impact of LifeLabs Inc. (which was acquired during August 2024), which has a lower revenue per requisition. On an organic basis, revenue per requisition increased 3.6% during the quarter.
Current wording
•Revenue per requisition was flat compared to the prior year period. The impact of LifeLabs, which has a lower revenue per requisition, was offset by an increase in the number of tests per requisition. On an organic basis, revenue per requisition increased 3.5% during the period.
Previous wording
For the three months ended March 31, 2025, cost of services increased by $194 million compared to the prior year period. The increase was primarily driven by the impact of recent acquisitions, wage increases, and, to a lesser extent, higher supplies expense, partially offset by cost savings and productivity improvements from our Invigorate program.
Current wording
For the three months ended June 30, 2025, cost of services increased by $225 million compared to the prior year period. The increase was primarily driven by the impact of recent acquisitions, wage increases, and, to a lesser extent, higher supplies expense, partially offset by cost savings and productivity improvements from our Invigorate program.
Previous wording
For the three months ended March 31, 2025, SG&A increased by $36 million compared to the prior period. The increase was primarily driven by the impact of recent acquisitions, partially offset by lower costs associated with changes in the value of our deferred compensation obligations.
Current wording
For the three months ended June 30, 2025, SG&A increased by $70 million compared to the prior period. The increase was primarily driven by the impact of recent acquisitions, and, to a lesser extent, higher costs associated with changes in the fair value of our deferred compensation obligations.
Previous wording
The changes in the value of our deferred compensation obligations is largely offset by changes in the value of the associated investments, which are recorded in other (expense) income, net. For further details regarding our deferred compensation plans, see Note 17 to the audited consolidated financial statements included in our 2024 Annual Report on Form 10-K.
Current wording
The changes in the value of our deferred compensation obligations is largely offset by changes in the value of the associated investments, which are recorded in other income, net. For further details regarding our deferred compensation plans, see Note 17 to the audited consolidated financial statements included in our 2024 Annual Report on Form 10-K.
Previous wording
For the three months ended March 31, 2025, amortization expense increased by $10 million compared to the prior year period as a result of recent acquisitions.
Current wording
For the three andsix months ended June 30, 2025, amortization expense increased by $10 million and $20 million, respectively, compared to the prior year periods as a result of recent acquisitions.
Previous wording
Other operating expense, net includes miscellaneous income and expense items and other charges related to operating activities.
Current wording
Other operating (income) expense, net includes miscellaneous income and expense items and other charges related to operating activities.
Previous wording
For both the three months ended March 31, 2025 and 2024, other operating expense, net primarily represents losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions.
Current wording
For both the three and six months ended June 30, 2024, other operating (income) expense, net primarily represents losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions.
Previous wording
For the three months ended March 31, 2025, interest expense, net increased by $24 million compared to the prior year period primarily due to the issuance during August 2024 of $1.85 billion of senior notes.
Current wording
For the three and six months ended June 30, 2025, interest expense, net increased by $23 million and $47 million, respectively, compared to the prior year periods primarily due to the issuance during August 2024 of $1.85 billion of senior notes.
Previous wording
Other (expense) income, net represents miscellaneous income and expense items related to non-operating activities, such as gains and losses associated with investments and other non-operating assets.
Current wording
Other income, net represents miscellaneous income and expense items related to non-operating activities, such as gains and losses associated with investments and other non-operating assets.
Previous wording
For the three months ended March 31, 2024, other (expense) income, net included $9 million of gains associated with investments in our deferred compensation plans.
Current wording
For the three and six months ended June 30, 2025, other income, net included $11 million and $9 million, respectively, of gains associated with investments in our deferred compensation plans.
Previous wording
For the three months ended March 31, 2025, other (expense) income, net included $2 million of losses associated with investments in our deferred compensation plans.
Current wording
For the three and six months ended June 30, 2024, other income, net included $3 million and $12 million, respectively, of gains associated with investments in our deferred compensation plans.
Previous wording
Income tax expense for the three months ended March 31, 2025 and 2024 was $59 million and $66 million, respectively.
Current wording
Income tax expense for the three months ended June 30, 2025 and 2024 was $97 million and $74 million, respectively.
Previous wording
The effective income tax rate for the three months ended March 31, 2025 and 2024 was 21.5% and 25.0%, respectively. The effective income tax rate benefited from $9 million and $2 million of excess tax benefits associated with stock-based compensation arrangements for the three months ended March 31, 2025 and 2024, respectively.
Current wording
The effective income tax rate for the three months ended June 30, 2025 and 2024 was 25.1% and 23.4%, respectively. The effective income tax rate benefited from $3 million and $1 million of excess tax benefits associated with stock-based compensation arrangements for the three months ended June 30, 2025 and 2024, respectively.
Previous wording
Equity in earnings of equity method investees, net of taxes, increased by $10 million for the three months ended March 31, 2025, compared to the prior year period, primarily due to the three months ended March 31, 2025 including an $8 million non-recurring gain related to a lease.
Current wording
Equity in earnings of equity method investees, net of taxes, increased by $19 million for the six months ended June 30, 2025, compared to the prior year period, primarily due to the six months ended June 30, 2024 including $9 million of net losses associated with changes in the carrying value of our strategic investments and the six months ended June 30, 2025 including an $8 million non-recurring gain related to a lease.
Previous wording
As of March 31, 2025 and December 31, 2024, the fair value of our debt was estimated at approximately $5.8 billion and $6.1 billion, respectively, principally using quoted prices in active markets and yields for the same or similar types of borrowings, taking into account the underlying terms of the debt instruments. As of March 31, 2025 and December 31, 2024, the estimated fair value was less than the carrying value of the debt by $59 million and $112 million, respectively. A hypothetical 10% increase in interest rates (representing 49 basis points and 35 basis points as of March 31, 2025 and December 31, 2024, respectively) would potentially reduce the estimated fair value of our debt by approximately $157 million and $184 million, respectively, as of March 31, 2025 and December 31, 2024.
Current wording
As of June 30, 2025 and December 31, 2024, the fair value of our debt was estimated at approximately $5.6 billion and $6.1 billion, respectively, principally using quoted prices in active markets and yields for the same or similar types of borrowings, taking into account the underlying terms of the debt instruments. As of June 30, 2025 and December 31, 2024, the estimated fair value was less than the carrying value of the debt by $26 million and $112 million, respectively. A hypothetical 10% increase in interest rates (representing 47 basis points and 35 basis points as of June 30, 2025 and December 31, 2024, respectively) would potentially reduce the estimated fair value of our debt by approximately $149 million and $184 million, respectively, as of June 30, 2025 and December 31, 2024.
Previous wording
Borrowings under our secured receivables credit facility and our senior unsecured revolving credit facility are subject to variable interest rates. Interest on our secured receivables credit facility is based on either commercial paper rates for highly-rated issuers or the adjusted Term Secured Overnight Financing Rate ("Term SOFR"), plus a spread. Interest on our senior unsecured revolving credit facility is based on certain published rates plus an applicable margin based on changes in our public debt ratings. As such, our borrowing cost under this credit arrangement is subject to fluctuations in interest rates and changes in our public debt ratings. As of March 31, 2025, the borrowing rates under these debt instruments were: for our secured receivables credit facility, commercial paper rates for highly-rated issuers or the adjusted Term SOFR, plus a spread of 0.80%; and for our senior unsecured revolving credit facility, the adjusted Term SOFR, plus 1.00%. As of March 31, 2025, there were $215 million of borrowings outstanding under the secured receivables credit facility and there were no borrowings outstanding under the senior unsecured revolving credit facility.
Current wording
Borrowings under our secured receivables credit facility and our senior unsecured revolving credit facility are subject to variable interest rates. Interest on our secured receivables credit facility is based on either commercial paper rates for highly-rated issuers or the adjusted Term Secured Overnight Financing Rate ("Term SOFR"), plus a spread. Interest on our senior unsecured revolving credit facility is based on certain published rates plus an applicable margin based on changes in our public debt ratings. As such, our borrowing cost under this credit arrangement is subject to fluctuations in interest rates and changes in our public debt ratings. As of June 30, 2025, the borrowing rates under these debt instruments were: for our secured receivables credit facility, commercial paper rates for highly-rated issuers or the adjusted Term SOFR, plus a spread of 0.80%; and for our senior unsecured revolving credit facility, the adjusted Term SOFR, plus 1.00%. As of June 30, 2025, there were no borrowings outstanding under either the secured receivables credit facility or the senior unsecured revolving credit facility.
Previous wording
The notional amount of fixed-to-variable interest rate swaps outstanding as of March 31, 2025 and December 31, 2024 was $1.25 billion and $700 million, respectively. The aggregate fair value of the fixed-to-variable interest rate swaps was $6 million and $34 million, in a liability position, as of March 31, 2025 and December 31, 2024, respectively.
Current wording
The notional amount of fixed-to-variable interest rate swaps outstanding as of June 30, 2025 and December 31, 2024 was $1.8 billion and $700 million, respectively. The aggregate fair value of the fixed-to-variable interest rate swaps was $17 million and $(34) million, in an asset (liability) position, as of June 30, 2025 and December 31, 2024, respectively.
Previous wording
Based on our net exposure to interest rate changes, a hypothetical 10% change to the variable rate component of our variable-rate indebtedness would not materially change our annual interest expense. A hypothetical 10% change in the SOFR curve (representing a 38 basis points change in the weighted average yield) would potentially change the fair value of our fixed- to-variable interest rate swaps by $35 million.
Current wording
Based on our net exposure to interest rate changes, a hypothetical 10% change to the variable rate component of our variable-rate indebtedness would not materially change our annual interest expense. A hypothetical 10% change in the SOFR curve (representing a 36 basis points change in the weighted average yield) would potentially change the fair value of our fixed- to-variable interest rate swaps by $46 million.
Previous wording
We regularly evaluate equity investments that do not have readily determinable fair values to determine if there are any indicators that the investments are impaired. The carrying value of our equity investments that do not have readily determinable fair values was $37 million as of March 31, 2025. In conjunction with the preparation of our March 31, 2025 financial statements, we considered whether the carrying values of our investments were impaired and concluded that no such impairment existed.
Current wording
We regularly evaluate equity investments that do not have readily determinable fair values to determine if there are any indicators that the investments are impaired. The carrying value of our equity investments that do not have readily determinable fair values was $36 million as of June 30, 2025. In conjunction with the preparation of our June 30, 2025 financial statements, we considered whether the carrying values of our investments were impaired and concluded that no such impairment existed.
Previous wording
Cash and cash equivalents consist of cash and highly-liquid short-term investments with original maturities, at the time of acquisition, of three months or less. Cash and cash equivalents as of March 31, 2025 totaled $188 million, compared to $549 million as of December 31, 2024.
Current wording
Cash and cash equivalents consist of cash and highly-liquid short-term investments with original maturities, at the time of acquisition, of three months or less. Cash and cash equivalents as of June 30, 2025 totaled $319 million, compared to $549 million as of December 31, 2024.
Previous wording
As of March 31, 2025, approximately 44% of our $188 million of consolidated cash and cash equivalents were held outside of the United States.
Current wording
As of June 30, 2025, approximately 29% of our $319 million of consolidated cash and cash equivalents were held outside of the United States.
Previous wording
Net cash provided by operating activities for the three months ended March 31, 2025 and 2024 was $314 million and $154 million, respectively. The $160 million increase in net cash provided by operating activities for the three months ended March 31, 2025, compared to the prior year period, was primarily a result of the timing of payments and increased operating income.
Current wording
Net cash provided by operating activities for the six months ended June 30, 2025 and 2024 was $858 million and $514 million, respectively. The $344 million increase in net cash provided by operating activities for the six months ended June 30, 2025, compared to the prior year period, was primarily a result of increased operating income, the timing of receipts and payments, and the payroll tax credit under the CARES Act.
Previous wording
Net cash used in investing activities for the three months ended March 31, 2025 and 2024 was $115 million and $213 million, respectively. This $98 million decrease in net cash used in investing activities for the three months ended March 31, 2025, compared to the prior year period, was primarily a result of decreased cash used for business acquisitions.
Current wording
Net cash used in investing activities for the six months ended June 30, 2025 and 2024 was $239 million and $413 million, respectively. This $174 million decrease in net cash used in investing activities for the six months ended June 30, 2025, compared to the prior year period, was a result of decreased cash used for business acquisitions, partially offset by slightly higher capital expenditures.
Previous wording
Net cash used in financing activities for the three months ended March 31, 2025 and 2024 was $561 million and $153 million, respectively. This $408 million increase in net cash used in financing activities for the three months ended March 31, 2025, compared to the prior year period, was primarily a result of repaying in full the outstanding indebtedness under our $600 million of 3.50% senior notes (which matured on March 30, 2025) using a combination of cash on hand and $215 million of borrowings under our secured receivables credit facility.
Current wording
Net cash used in financing activities for the six months ended June 30, 2025 and 2024 was $854 million and $516 million, respectively. This $338 million increase in net cash used in financing activities for the six months ended June 30, 2025, compared to the prior year period, was primarily a result of repaying in full the outstanding indebtedness under our $600 million of 3.50% senior notes at maturity. The six months ended June 30, 2024 included the repayment in full of the outstanding indebtedness under our $300 million of 4.25% senior notes at maturity.
Previous wording
During the three months ended March 31, 2025, we borrowed $215 million under our secured receivables credit facility, none of which was repaid prior to March 31, 2025. During the three months ended March 31, 2025, there were no borrowings or repayments under our senior unsecured revolving credit facility. During the three months ended March 31, 2024, there were no borrowings or repayments under our secured receivables credit facility and our senior unsecured revolving credit facility.
Current wording
During the six months ended June 30, 2025, we borrowed $400 million under our secured receivables credit facility, which was repaid prior to June 30, 2025. During the six months ended June 30, 2025, there were no borrowings or repayments under our senior unsecured revolving credit facility. During the six months ended June 30, 2024, there were no borrowings or repayments under our secured receivables credit facility and our senior unsecured revolving credit facility.
Previous wording
During the first quarter of 2025, our Board of Directors declared a quarterly cash dividend of $0.80 per common share. During each of the four quarters of 2024, our Board of Directors declared a quarterly cash dividend of $0.75 per common share.
Current wording
During each of the first and second quarters of 2025, our Board of Directors declared a quarterly cash dividend of $0.80 per common share. During each of the four quarters of 2024, our Board of Directors declared a quarterly cash dividend of $0.75 per common share.
Previous wording
For both the three months ended March 31, 2025 and 2024, we repurchased no shares of our common stock.
Current wording
For both the six months ended June 30, 2025 and 2024, we repurchased no shares of our common stock.
Previous wording
Our equity method investees primarily consist of a diagnostic information services joint venture and an investment in a fund that purchases strategic holdings in private companies in the healthcare industry. Such investees are accounted for under the equity method of accounting. Our investment in equity method investees is less than 5% of our consolidated total assets. Our proportionate share of income before income taxes associated with our equity method investees is approximately 5% of our consolidated income before income taxes and equity in earnings of equity method investees. We have no material unconditional obligations or guarantees to, or in support of, our equity method investees and their operations.
Current wording
Our equity method investees primarily consist of a diagnostic information services joint venture and an investment in a fund that purchases strategic holdings in private companies in the healthcare industry. Such investees are accounted for under the equity method of accounting. Our investment in equity method investees is less than 5% of our consolidated total assets. Our proportionate share of income before income taxes associated with our equity method investees is less than 5% of our consolidated income before income taxes and equity in earnings of equity method investees. We have no material unconditional obligations or guarantees to, or in support of, our equity method investees and their operations.
Previous wording
As of March 31, 2025, we had $1.1 billion of borrowing capacity available under our existing credit facilities, including $308 million available under our secured receivables credit facility and $750 million available under our senior unsecured revolving credit facility. There were $215 million of borrowings outstanding under the secured receivables credit facility and no borrowings outstanding under the senior unsecured revolving credit facility as of March 31, 2025. In support of our risk management program, $77 million in letters of credit under the secured receivables credit facility were outstanding as of March 31, 2025.
Current wording
As of June 30, 2025, we had $1.3 billion of borrowing capacity available under our existing credit facilities, including $523 million available under our secured receivables credit facility and $750 million available under our senior unsecured revolving credit facility. There were no borrowings outstanding under either the secured receivables credit facility or the senior unsecured revolving credit facility as of June 30, 2025. In support of our risk management program, $77 million in letters of credit under the secured receivables credit facility were outstanding as of June 30, 2025.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
•$3 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.03 per diluted share.
Current report — wording carried from elsewhere
•The increase in DIS revenues compared to the prior year period was driven primarily by the impact of recent acquisitions and, to a lesser extent, organic growth. For the six months ended June 30, 2025, recent acquisitions contributed approximately 10.1% to DIS revenues.
Current report — wording carried from elsewhere
•DIS volume increased by 14.3% compared to the prior year period driven by the impact of recent acquisitions, which contributed approximately 13.7% to DIS volume, with organic volume up by 0.6%.
Current report — wording carried from elsewhere
DS revenues for the six months ended June 30, 2025 decreased by 5.5% compared to the prior year period principally due to lower revenues associated with our risk assessment services offered to insurers.
Current report — wording carried from elsewhere
For the six months ended June 30, 2025, cost of services increased by $419 million compared to the prior year period. The increase was primarily driven by the impact of recent acquisitions, wage increases, and, to a lesser extent, higher supplies expense, partially offset by cost savings and productivity improvements from our Invigorate program.
Current report — wording carried from elsewhere
For the six months ended June 30, 2025, SG&A increased by $106 million compared to the prior period. The increase was primarily driven by the impact of recent acquisitions, and, to a lesser extent, wage increases.
Current report — wording carried from elsewhere
The effective income tax rate for the six months ended June 30, 2025 and 2024 was 23.6% and 24.2%, respectively. The effective income tax rate benefited from $12 million and $3 million of excess tax benefits associated with stock-based compensation arrangements for the six months ended June 30, 2025 and 2024, respectively.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
For the three months ended March 31, 2025: