Labcorp Holdings Inc. Q4 FY2025 earnings call

Management highlighted significant progress in 2025 across strategic priorities including deepening partnerships with health systems and labs, advancing specialty testing with over 130 new tests launched, successfully integrating Invitae, growth in Consumer Health with Labcorp OnDemand, and progress with technology and AI-powered solutions. They also announced a strategic investment in a new central laboratory facility.

Fourth quarter Diagnostics Laboratories revenue was $2.7 billion, an increase of 5.5% compared to last year, with strong organic growth of 4.1% and acquisitions contributing 1.5%. Total volume increased 2.2% with organic volume and acquisitions each contributing 1.1%. Price/mix increased 3.3%, with organic price/mix contributing 3%, primarily due to an increase in test per session. Acquisitions contributed 0.3%. Biopharma Laboratory Services (BLS) revenue was $793 million, an increase of 3.4% compared to last year due to an increase in organic revenue of 0.6% and foreign currency translation of 2.8%. Central Labs revenue grew 11% or 8% constant currency in Q4.

2026 enterprise revenue expected to grow 4.7% to 6% compared to prior year. Diagnostics revenue expected to be up 5% to 6% with majority from organic growth. BLS revenue expected to grow 3% to 5% with impact from foreign currency translation and actions in early development. Expect enterprise margins to increase with both segments improving, adjusted EPS guidance $17.65 to $18.25 with midpoint growth ~9%, free cash flow guidance $1.24 billion to $1.36 billion.

Risks include impact of PAMA, competitive landscape in diagnostic business, and timing of M&A and business streamlining in early development.

Q: On 2026 guidance, how about contributions from price and volume?

A: Adam said Diagnostics revenue growth 5%-6% with majority organic, half from volume and half from price/mix.

Q: Thoughts on Invitae integration?

A: Integration went well, expect strong revenue growth in specialty area but won't break out Invitae specifically.

Q: Fourth quarter organic volume lighter, any specifics?

A: Lower referrals from a large consumer genetic client with financial challenges in Q4 and weather impact, adjusted for which would be over 2% growth.

Q: Where conservative in 2026 guidance?

A: Utilization environment, M&A pipeline timing, early development organic growth flatness.

Q: Competitive landscape in diagnostic business?

A: Focus on hospital deals, specialty testing growth, Labcorp OnDemand growth.

Q: PAMA impact?

A: Pleased with delay, advocate for RESULTS Act.

Q: CapEx in central lab?

A: Investing in new strategic site and infrastructure to support growth.

Q: ED market 2026?

A: Early development business relatively flat but improving as $50M revenue actions are taken.

Q: New oncology tests?

A: Strong position in precision oncology with over 450 tests, MRD testing expanded, oncologists tend to use all testing needs.

Q: Weather impact on first quarter?

A: Weather in Jan had impact, reflected in guidance year-to-date, cadence similar to 2025.

Q: PAMA savings potential?

A: Planned to reinvest portion of savings from PAMA delay into business.

Q: Esoteric testing?

A: Esoteric testing growth outpacing routine, Q4 2025 contribution 41.5% vs Q1 2023 37.5%.

Q: Diagnostics deal pipeline?

A: Robust pipeline with hospitals and labs, discussions going well despite some approval timing.

Q: Consumer-driven market durability?

A: Consumer business growing with Labcorp OnDemand, Ovia Health, genetic testing, strong growth potential.

Q: Early development margin?

A: Expect margin improvement in BLS with actions in early development and top line growth.