Quest Diagnostics Incorporated Revenue & Financials

For fiscal year 2025 (ended December 31, 2025), Quest Diagnostics Incorporated reported net revenues of $11.035 billion, an 11.8% increase from $9.872 billion in 2024. The revenue growth was driven by a 12.3% increase in requisition volume, with organic requisition volume growing 3.4% and acquisition-related volume contributing the remainder (primarily the LifeLabs acquisition, which closed in August 2024). Revenue per requisition was essentially flat at 0.1% growth, reflecting reimbursement pressure and mix shifts. The company reported operating income of $1.556 billion, a 15.6% increase from $1.346 billion in 2024. Operating margin improved to 14.1% from 13.6%, demonstrating operating leverage as fixed costs were spread across higher volumes. Net income attributable to Quest Diagnostics was $992 million, up 13.9% from $871 million in 2024. Diluted earnings per share were $8.75, up 13.8% from $7.69. On an adjusted basis, which excludes restructuring and integration charges, amortization, and other special items, operating income was $1.759 billion (15.9% margin), up 14.1% from $1.541 billion (15.6% margin) in 2024. Adjusted net income attributable to the company was $1.118 billion, up 10.5% from $1.011 billion. Adjusted diluted EPS was $9.85, up 10.3% from $8.93. The cost structure shows the service-intensive nature of the business. Cost of services was $7.370 billion in 2025 (66.8% of revenue), up 11.2% from $6.628 billion in 2024. The cost of services ratio improved slightly as volume leverage offset wage and reagent inflation. Selling, general, and administrative expenses were $1.967 billion (17.8% of revenue), up 11.1% from $1.770 billion. Amortization of intangible assets was $154 million, up from $127 million, reflecting the LifeLabs acquisition and other deals. Other operating income was $12 million in 2025 compared to $1 million in expense in 2024, driven by litigation recoveries and asset sales. Interest expense, net was $264 million, up from $201 million, reflecting higher debt levels from the LifeLabs acquisition. Other income, net was $26 million, down from $30 million. The effective tax rate on a GAAP basis was 23.8% ($314 million tax expense on $1.318 billion pre-tax income), compared to 23.2% in 2024. The adjusted effective tax rate was approximately 23.0%. Equity in earnings of equity method investees, net of taxes, was $42 million, up from $19 million. Net income attributable to noncontrolling interests was $54 million, up from $50 million. Cash flow was exceptionally strong. Cash provided by operating activities was $1.886 billion, up 41.4% from $1.334 billion in 2024. The increase reflected higher net income, favorable working capital changes (particularly accounts payable and accrued expenses), and improved collections. Capital expenditures were $527 million, up 23.8% from $425 million, driven by laboratory equipment purchases, facility upgrades, and technology investments. Free cash flow (operating cash flow minus capital expenditures) was approximately $1.36 billion. Business acquisitions, net of cash acquired, were $101 million in 2025, down from $2.164 billion in 2024 (which primarily reflected the LifeLabs acquisition). The company also completed the Spectra Laboratories acquisition from Fresenius Medical Care in 2025, though the specific cash outlay was not separately disclosed in the 2025 10-K summary. Cash used in financing activities was $1.388 billion, reflecting debt repayments ($1.012 billion), treasury stock purchases ($450 million), dividend payments ($353 million), and other items offset by borrowings ($410 million). The balance sheet as of December 31, 2025, showed cash and cash equivalents of approximately $135 million (down from higher levels due to acquisition financing and capital deployment). Total debt was approximately $4.5-5.0 billion, reflecting the LifeLabs acquisition financing. The debt-to-EBITDA ratio remained within investment-grade parameters. The company has guided fiscal 2026 net revenues to $11.70-$11.82 billion (6.0-7.1% growth), reported diluted EPS to $9.45-$9.65, and adjusted diluted EPS to $10.50-$10.70. Cash provided by operations is expected to be approximately $1.75 billion, with capital expenditures of approximately $550 million. The quarterly dividend was increased 7.5% to $0.86 per share in February 2026, reflecting confidence in sustained cash flow generation.