QUEST DIAGNOSTICS INC
For the period ended Mar 31, 2026. Filed Apr 22, 2026.
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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.
Mar 31, 2026 · Filed Apr 22, 2026
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 2025-09-30; filed 2025-10-21.
0001022079-25-000218
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-22.
0001022079-26-000043
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 143 previous paragraphs and 110 current paragraphs.
54 unchanged; 35 reworded; 19 added; 49 removed; 5 previous and 2 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 (19)
Current report
First Quarter Highlights
Current report
Venture with Corewell Health
Current report
During August 2025, we and Corewell Health signed a definitive agreement to form a new entity which will perform laboratory testing in the state of Michigan via a new laboratory facility. The parties completed the transaction during January 2026. In connection with the transaction, Corewell Health contributed a laboratory business over which we obtained a controlling financial interest. Under the terms of the transaction, the parties are continuing to serve providers and patients in Michigan from their existing patient service centers (which are operated by the newly formed entity) and their existing laboratories until a new laboratory is operational during 2027. Equity ownership of the newly formed entity is shared 51% by us and 49% by Corewell Health and we are consolidating the entity in our consolidated financial statements. The business is included in our DIS segment.
Current report
For further details see Note 5 to the interim unaudited consolidated financial statements.
Current report
Results for the three months ended March 31, 2026 were affected by certain items that on a net basis decreased diluted earnings per share by $0.26 as follows:
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; and
Current report
•$12 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.11 per diluted share.
Current 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:
Current report
•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 report
•$9 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.08 per diluted share.
Current report
Net revenues for the three months ended March 31, 2026 increased by 9.2% compared to the prior year period principally driven by organic revenue growth of 9.0%.
Current report
DIS revenues for the three months ended March 31, 2026 increased by 9.4% compared to the prior year period.
Current report
•DIS volume increased by 10.9% compared to the prior year period principally driven by organic growth of 10.8%, of which approximately 7% was due to both our new relationship with Corewell Health to provide Collaborative Lab Solutions and increasing our laboratory testing at dialysis clinics owned by Fresenius Medical Care in the United States. Excluding the Corewell Health and Fresenius Medical Care related testing, organic volume increased 3.8% compared to the prior year period.
Current report
•Revenue per requisition decreased by 1.3% compared to the prior year period primarily driven by the business mix associated with our new relationships with Corewell Health and Fresenius Medical Care, which include a greater proportion of routine tests than most of our clinical testing. Excluding the Corewell Health and Fresenius Medical Care business mix impacts, revenue per requisition increased by approximately 2.5% primarily driven by an increase in the number of tests per requisition and favorable test mix.
Current report
DS revenues for the three months ended March 31, 2026 were principally consistent with the prior year period.
Current report
For the three months ended March 31, 2026, amortization expense was principally consistent with the prior year period.
Current report
Other Expense, Net
Current report
Net cash provided by operating activities for the three months ended March 31, 2026 and 2025 was $278 million and $314 million, respectively. The $36 million decrease in net cash provided by operating activities for the three months ended March 31, 2026, compared to the prior year period, was primarily a result of the timing of operating receipts and disbursements and higher bonus payments in the current period versus a year ago, partially offset by increased operating income.
Current report
Net cash used in financing activities for the three months ended March 31, 2026 and 2025 was $152 million and $561 million, respectively. This $409 million decrease in net cash used in financing activities for the three months ended March 31, 2026, compared to the prior year period, was primarily a result of the prior year period including the repayment in full of 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.
Removed paragraphs (49)
Previous report
Third Quarter Highlights
Previous report
Acquisition of select clinical testing assets of Spectra Laboratories
Previous report
On August 4, 2025, we acquired select clinical testing assets of Fresenius Medical Care's wholly-owned Spectra Laboratories in an all-cash transaction for $34 million. The acquired business is included in our DIS business. See Note 5 to the interim unaudited consolidated financial statements for further discussion.
Previous report
Outlook and Trends
Previous 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.
Previous 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.
Previous 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.
Previous 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. Our consolidated deferred income tax liabilities as of September 30, 2025 and December 31, 2024 were $378 million and $278 million, respectively. The increase was principally due to the domestic research cost expensing and bonus depreciation elements of the OBBBA.
Previous 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.
Previous report
Results for the three months ended September 30, 2025 were affected by certain items that on a net basis decreased diluted earnings per share by $0.44 as follows:
Previous report
•pre-tax charges of $22 million, recorded in other operating expense, net, or $0.15 per diluted share, comprised of a $15 million charge to earnings related to legal matters, a $5 million impairment charge on certain long-lived assets related to the 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
Previous report
•pre-tax charges of $11 million ($1 million recorded in cost of services and $10 million recorded in selling, general and administrative expenses), or $0.07 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business; partially offset by
Previous report
Results for the nine months ended September 30, 2025 were affected by certain items that on a net basis decreased diluted earnings per share by $0.86 as follows:
Previous report
•pre-tax amortization expense of $117 million recorded in amortization of intangible assets, or $0.76 per diluted share;
Previous report
•pre-tax charges of $52 million, recorded in other operating expense, net, or $0.36 per diluted share, primarily comprised of a $29 million impairment charge on certain long-lived assets related to the exit of a business, a $15 million charge to earnings related to legal matters and, to a lesser extent, losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; and
Previous report
•pre-tax charges of $37 million ($8 million recorded in cost of services and $29 million recorded in selling, general and administrative expenses), or $0.24 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business; partially offset by
Previous report
•pre-tax gains of $54 million ($46 million recorded in other operating 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 Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") associated with the retention of employees and, to a lesser extent, an $8 million non-recurring gain related to a lease;
Previous 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
Previous report
Results for the three months ended September 30, 2024 were affected by certain items that on a net basis decreased diluted earnings per share by $0.31 as follows:
Previous report
•pre-tax amortization expense of $32 million recorded in amortization of intangible assets, or $0.21 per diluted share;
Previous report
•a pre-tax gain of $8 million, recorded in other income, net, or $0.06 per diluted share, representing a non-recurring gain associated with a foreign exchange forward contract utilized in conjunction with an acquisition, and
Previous report
Results for the nine months ended September 30, 2024 were affected by certain items that on a net basis decreased diluted earnings per share by $0.96 as follows:
Previous report
•pre-tax amortization expense of $90 million recorded in amortization of intangible assets, or $0.59 per diluted share;
Previous report
•pre-tax net charges of $45 million ($19 million recorded in cost of services and $28 million recorded in selling, general and administrative expenses, partially offset by a $2 million gain recorded in other operating expense, net), or $0.31 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business;
Previous report
•pre-tax charges of $11 million recorded in equity in earnings of equity method investees, net of taxes, or $0.07 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments; partially offset by
Previous report
•a pre-tax gain of $8 million, recorded in other income, net, or $0.06 per diluted share, representing a non-recurring gain associated with a foreign exchange forward contract utilized in conjunction with an acquisition, and
Previous report
Net revenues for the three months ended September 30, 2025 increased by 13.1% compared to the prior year period. For the three months ended September 30, 2025, organic growth was 6.8% compared to the prior year period.
Previous report
DIS revenues for the three months ended September 30, 2025 increased by 13.5% compared to the prior year period. For the three months ended September 30, 2025:
Previous report
•DIS volume increased by 12.5% compared to the prior year period driven by the impact of recent acquisitions, which contributed approximately 8.6% to DIS volume, with organic volume up 3.9%.
Previous report
•Total revenue per requisition was up 0.8% versus the prior year period as an increase in organic revenue per requisition was substantially offset by the impact of the LifeLabs acquisition (which carries a lower revenue per requisition). On an organic basis, revenue per requisition was up 3.0% in the quarter versus the prior year period driven primarily by an increase in the number of tests per requisition and test mix.
Previous report
DS revenues for the three months ended September 30, 2025 decreased by 1.0% compared to the prior year period principally due to lower revenues associated with our risk assessment services offered to insurers.
Previous report
Net revenues for the nine months ended September 30, 2025 increased by 13.5% compared to the prior year period. For the nine months ended September 30, 2025, organic growth was 4.8% compared to the prior year period.
Previous report
DIS revenues for the nine months ended September 30, 2025 increased by 14.0% compared to the prior year period. For the nine months ended September 30, 2025:
Previous report
•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 nine months ended September 30, 2025, recent acquisitions contributed approximately 8.9% to DIS revenues.
Previous report
•DIS volume increased by 13.8% compared to the prior year period driven by the impact of recent acquisitions, which contributed approximately 12.0% to DIS volume, with organic volume up by 1.8%.
Previous report
•Revenue per requisition was flat compared to the prior year period. An increase in the number of tests per requisition and test mix was offset by the impact of LifeLabs, which has a lower revenue per requisition. On an organic basis, revenue per requisition increased 3.3% during the period.
Previous report
DS revenues for the nine months ended September 30, 2025 decreased by 4.0% compared to the prior year period principally due to lower revenues associated with our risk assessment services offered to insurers.
Previous report
For the nine months ended September 30, 2025, SG&A increased by $159 million compared to the prior period. The increase was primarily driven by the impact of recent acquisitions, and, to a lesser extent, higher compensation costs and higher depreciation expense.
Previous report
For the three andnine months ended September 30, 2025, amortization expense increased by $7 million and $27 million, respectively, compared to the prior year periods as a result of recent acquisitions.
Previous report
For thethree months ended September 30, 2025, other operating expense, net is comprised of a $15 million charge to earnings related to legal matters, an impairment charge of $5 million on certain long-lived assets related to the exit of a business and $2 million of losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions.
Showing the first 40 of 49 passages. Open the source sections for the rest.
Reworded paragraphs (35)
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 97% 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 95% of our consolidated net revenues.
Previous wording
For the nine months ended September 30, 2025, we incurred $37 million of pre-tax charges in connection with restructuring and integration activities, including $18 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 three months ended March 31, 2026, we incurred $7 million of pre-tax charges in connection with restructuring and integration activities, principally including 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 $0.25 per diluted share;
Current wording
•pre-tax amortization expense of $37 million, recorded in amortization of intangible assets, or $0.25 per diluted share;
Previous wording
•$6 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.05 per diluted share.
Current wording
•pre-tax charges of $7 million, principally recorded in equity in earnings of equity method investees, net of taxes, or $0.05 per diluted share, representing the losses associated with changes in the carrying value of our strategic investments;
Previous wording
•pre-tax charges of $5 million ($1 million recorded in selling, general and administrative expenses and $4 million recorded in other operating expense, net), or $0.04 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
Current wording
•pre-tax charges of $4 million, principally recorded in other operating 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 net charges of $18 million ($5 million recorded in cost of services and $15 million recorded in selling, general and administrative expenses, partially offset by a $2 million gain recorded in other operating expense, net), or $0.13 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business;
Current 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
Previous wording
•pre-tax charges of $12 million ($2 million recorded in selling, general and administrative expenses and $10 million recorded in other operating expense, net), or $0.10 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
Current 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
Previous wording
•The increase in DIS revenues compared to the prior year period was driven by both organic growth and the impact of recent acquisitions. For the three months ended September 30, 2025, recent acquisitions contributed approximately 6.5% to DIS revenues.
Current wording
•The increase in DIS revenues compared to the prior year period was principally driven by the organic growth of 9.2%.
Previous wording
For the three months ended September 30, 2025, cost of services increased by $190 million compared to the prior year period. The increase was primarily driven by the impact of recent acquisitions, wage increases and higher employee health care costs 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 March 31, 2026, cost of services increased by $164 million compared to the prior year period. The increase was primarily driven by higher compensation costs 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 September 30, 2025, SG&A increased by $53 million compared to the prior period. The increase was primarily driven by the impact of recent acquisitions, and, to a lesser extent, higher compensation costs.
Current wording
For the three months ended March 31, 2026, SG&A increased by $28 million compared to the prior period. The increase was primarily driven by higher compensation costs.
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 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 expense, net. For further details regarding our deferred compensation plans, see Note 17 to the audited consolidated financial statements included in our 2025 Annual Report on Form 10-K.
Previous wording
For both the three and nine months ended September 30, 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 months ended March 31, 2026 and 2025, other operating expense, net primarily represents losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions.
Previous wording
Net cash (used in) provided by financing activities for the nine months ended September 30, 2025 and 2024 was $(1.1) billion and $1.3 billion, respectively. The nine months ended September 30, 2025 included the repayment in full of the outstanding indebtedness under our $600 million of 3.50% senior notes at maturity and $150 million of share repurchases of our common stock. The nine months ended September 30, 2024 included both the issuance of $1.85 billion of Senior Notes during August 2024 and the repayment in full of the outstanding indebtedness under our $300 million of 4.25% senior notes at maturity.
Current wording
For the three months ended March 31, 2026, interest expense, net decreased by $4 million compared to the prior year period primarily due to the repayment in full of the outstanding indebtedness under our $600 million of 3.50% senior notes, which matured on March 30, 2025.
Previous 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.
Current wording
Other expense, 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 and nine months ended September 30, 2025, other income, net included $7 million and $16 million, respectively, of gains associated with investments in our deferred compensation plans.
Current wording
For both the three months ended March 31, 2026 and 2025, other expense, net included $2 million of losses associated with investments in our deferred compensation plans.
Previous wording
Income tax expense for the three months ended September 30, 2025 and 2024 was $77 million and $65 million, respectively.
Current wording
Income tax expense for the three months ended March 31, 2026 and 2025 was $74 million and $59 million, respectively.
Previous wording
The effective income tax rate for the nine months ended September 30, 2025 and 2024 was 23.6% and 23.4%, respectively. The effective income tax rate benefited from $15 million and $6 million of excess tax benefits associated with stock-based compensation arrangements for the nine months ended September 30, 2025 and 2024, respectively.
Current wording
The effective income tax rate for the three months ended March 31, 2026 and 2025 was 22.2% and 21.5%, respectively. The effective income tax rate benefited from $12 million and $9 million of excess tax benefits associated with stock-based compensation arrangements for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
Equity in earnings of equity method investees, net of taxes, increased by $21 million for the nine months ended September 30, 2025, compared to the prior year period, primarily due to the nine months ended September 30, 2024 including $11 million of net losses associated with changes in the carrying value of our strategic investments and the nine months ended September 30, 2025 including an $8 million non-recurring gain related to a lease.
Current wording
Equity in earnings of equity method investees, net of taxes, decreased by $14 million for the three months ended March 31, 2026, 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 and the three months ended March 31, 2026 including $7 million of losses associated with changes in the carrying value of our strategic investments.
Previous wording
As of September 30, 2025 and December 31, 2024, the fair value of our debt was estimated at approximately $5.7 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 September 30, 2025 and December 31, 2024, the estimated fair value was more than (less than) the carrying value of the debt by $56 million and $(112) million, respectively. A hypothetical 10% increase in interest rates (representing 45 basis points and 35 basis points as of September 30, 2025 and December 31, 2024, respectively) would potentially reduce the estimated fair value of our debt by approximately $141 million and $184 million, respectively, as of September 30, 2025 and December 31, 2024.
Current wording
As of March 31, 2026 and December 31, 2025, the fair value of our debt was estimated at approximately $5.6 billion and $5.7 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, 2026 and December 31, 2025, the estimated fair value was more than (less than) the carrying value of the debt by $(15) million and $59 million, respectively. A hypothetical 10% increase in interest rates (representing 48 basis points and 44 basis points as of March 31, 2026 and December 31, 2025, respectively) would potentially reduce the estimated fair value of our debt by approximately $136 million and $135 million as of March 31, 2026 and December 31, 2025, respectively.
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 September 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 September 30, 2025, there were no borrowings outstanding under either the secured receivables credit facility or 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 March 31, 2026, 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, 2026, there were no borrowings outstanding under both the secured receivables credit facility and the senior unsecured revolving credit facility.
Previous wording
The notional amount of fixed-to-variable interest rate swaps outstanding as of September 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 $18 million and $(34) million, in an asset (liability) position, as of September 30, 2025 and December 31, 2024, respectively.
Current wording
The notional amount of fixed-to-variable interest rate swaps outstanding as of both March 31, 2026 and December 31, 2025 was $1.8 billion. The aggregate net fair value of the fixed-to-variable interest rate swaps was $1 million and $14 million, in a net asset (liability) position, as of March 31, 2026 and December 31, 2025, 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 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.
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 38 basis points change in the weighted average yield) would potentially change the fair value of our fixed- to-variable interest rate swaps by $44 million.
Previous wording
For further details regarding our outstanding debt, see Note 7 to the interim unaudited consolidated financial statements and Note 13 to the audited consolidated financial statements included in our 2024 Annual Report on Form 10-K. For details regarding our financial instruments and hedging activities, see Note 8 to the interim unaudited consolidated financial statements and Note 15 to the audited consolidated financial statements included in our 2024 Annual Report on Form 10-K.
Current wording
For further details regarding our outstanding debt, see Note 13 to the audited consolidated financial statements included in our 2025 Annual Report on Form 10-K. For details regarding our financial instruments and hedging activities, see Note 7 to the interim unaudited consolidated financial statements and Note 15 to the audited consolidated financial statements included in our 2025 Annual Report on Form 10-K.
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 $36 million as of September 30, 2025. In conjunction with the preparation of our September 30, 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 $47 million as of March 31, 2026. In conjunction with the preparation of our March 31, 2026 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 September 30, 2025 totaled $432 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 March 31, 2026 totaled $393 million, compared to $420 million as of December 31, 2025.
Previous wording
As of September 30, 2025, approximately 17% of our $432 million of consolidated cash and cash equivalents were held outside of the United States.
Current wording
As of March 31, 2026, approximately 21% of our $393 million of consolidated cash and cash equivalents were held outside of the United States.
Previous wording
Days sales outstanding, a measure of billing and collection efficiency, was 47 days as of September 30, 2025, 48 days as of December 31, 2024 and 49 days as of September 30, 2024.
Current wording
Days sales outstanding, a measure of billing and collection efficiency, was 48 days as of March 31, 2026, 48 days as of December 31, 2025 and 47 days as of March 31, 2025.
Previous wording
Net cash used in investing activities for the nine months ended September 30, 2025 and 2024 was $440 million and $2.0 billion, respectively. This $1.6 billion decrease in net cash used in investing activities for the nine months ended September 30, 2025, compared to the prior year period, was a result of decreased cash used for business acquisitions, partially offset by higher capital expenditures.
Current wording
Net cash used in investing activities for the three months ended March 31, 2026 and 2025 was $152 million and $115 million, respectively. This $37 million increase in net cash used in investing activities for the three months ended March 31, 2026, compared to the prior year period, was primarily a result of increased cash used for business acquisitions.
Previous wording
During the nine months ended September 30, 2025, we borrowed $410 million under our secured receivables credit facility, which was repaid prior to September 30, 2025. During the nine months ended September 30, 2025, there were no borrowings or repayments under our senior unsecured revolving credit facility. During the nine months ended September 30, 2024, there were no borrowings or repayments under our secured receivables credit facility and our senior unsecured revolving credit facility.
Current wording
During the three months ended March 31, 2026, there were no borrowings or repayments under our secured receivables credit facility. During the three months ended March 31, 2026, there were no borrowings or repayments under our senior unsecured revolving credit facility. 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.
Previous wording
During the first three 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.
Current wording
During the first quarter of 2026, our Board of Directors declared a quarterly cash dividend of $0.86 per common share. During each of the four quarters of 2025, our Board of Directors declared a quarterly cash dividend of $0.80 per common share.
Previous wording
As of September 30, 2025, $0.7 billion remained available under our share repurchase authorization. The share repurchase authorization has no set expiration or termination date.
Current wording
In February 2026, our Board of Directors authorized us to repurchase an additional $1 billion of our common stock. As of March 31, 2026, $1.4 billion remained available under our share repurchase authorization. The share repurchase authorization has no set expiration or termination date.
Previous wording
For the nine months ended September 30, 2024, we repurchased no shares of our common stock.
Current wording
For both the three months ended March 31, 2026 and March 31, 2025, we repurchased no shares of our common stock.
Previous wording
We estimate that we will invest approximately $500 million during 2025 for capital expenditures, to support and grow our existing operations, principally related to investments in laboratory equipment and facilities, including laboratory automations and information technology to support our diagnostic offerings.
Current wording
We estimate that we will invest approximately $550 million during 2026 for capital expenditures, to support and grow our existing operations, principally related to investments in laboratory equipment and facilities, including laboratory automations and information technology to support our diagnostic offerings.
Previous wording
In February 2025, we committed to a multi-year project ("Project Nova") to modernize our "Order-to-Cash" business processes including related information technology infrastructure and underlying enabling technologies. As part of the project, we are partnering with a third-party, Epic, via a license agreement. We expect to deliver value throughout the implementation of Project Nova, as it unlocks a variety of streamlined operational benefits, reduced technology-related operating costs, accelerated revenue opportunities and improvements to the customer and patient experience. See our 2024 Annual Report on Form 10-K for further details.
Current wording
In February 2025, we committed to a multi-year project ("Project Nova") to modernize our "Order-to-Cash" business processes including related information technology infrastructure and underlying enabling technologies. We expect to deliver value throughout the implementation of Project Nova, as it unlocks a variety of streamlined operational benefits, reduced technology-related operating costs, accelerated revenue opportunities and improvements to the customer and patient experience. See our 2025 Annual Report on Form 10-K for further details.
Previous wording
As of September 30, 2025, we had $1.3 billion of borrowing capacity available under our existing credit facilities, including $522 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 September 30, 2025. In support of our risk management program, $78 million in letters of credit under the secured receivables credit facility were outstanding as of September 30, 2025.
Current wording
As of March 31, 2026, we had $1.3 billion of borrowing capacity available under our existing credit facilities, including $518 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 the secured receivables credit facility and no borrowings outstanding under the senior unsecured revolving credit facility as of March 31, 2026. In support of our risk management program, $82 million in letters of credit under the secured receivables credit facility were outstanding as of March 31, 2026.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
•pre-tax amortization expense of $39 million recorded in amortization of intangible assets, or $0.26 per diluted share;
Current report — wording carried from elsewhere
For the three months ended March 31, 2026:
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
•$3 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.03 per diluted share.
Previous report — wording carried elsewhere
•$15 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.13 per diluted share.
Previous report — wording carried elsewhere
•pre-tax charges of $2 million recorded in equity in earnings of equity method investees, net of taxes, or $0.02 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments; partially offset by
Previous report — wording carried elsewhere
•$3 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.03 per diluted share.
Previous report — wording carried elsewhere
For the nine months ended September 30, 2025, cost of services increased by $609 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.