Quest Diagnostics Incorporated

Second-quarter 2026 consolidated revenue was $3.04 billion, up 10.2% year over year; organic revenue grew 10%. Diagnostic Information Services revenue rose 10.3% with 10.1% organic growth. Total requisitions increased 13.1% year over year, and organic volume was up 13%; excluding Corewell and Fresenius, volume grew 4.1%. Revenue per requisition fell 2.8% due to mix, but was up 2.9% excluding Corewell/Fresenius mix. Reported operating income was $459 million, or 15.1% of revenue, versus $438 million, or 15.9% last year; adjusted operating income was $502 million, or 16.5% of revenue, versus $466 million, or 16.9% last year. Reported EPS was $2.84 versus $2.47; adjusted EPS was $3.12 versus $2.62. Cash from operations was $875 million year-to-date through Q2 versus $858 million last year. Full-year 2026 guidance was raised to revenue of $11.95 billion to $12.05 billion, reported EPS of $9.97 to $10.17, and adjusted EPS of $11.05 to $11.25. Management now expects cash from operations of about $1.8 billion and capex of about $550 million; operating margin is still expected to expand year over year.

Jim Davis framed the quarter as evidence that Quest is executing well across its strategy and benefiting from sustained demand across physicians, hospitals, and consumers. He emphasized automation and AI initiatives, new customer wins, and growth in areas such as kidney testing, consumer wellness, brain health, oncology, and women’s health. His tone was confident and constructive, and he highlighted the decision to raise guidance again for the year.

Sam Samad said Q2 growth was driven by strong volume, with revenue per requisition benefiting after adjusting for Corewell/Fresenius mix and test-per-requisition gains. He noted the main margin drags in the quarter were Nova, Corewell/Fresenius, and supplemental deferred compensation, totaling a 70-basis-point hit to operating margin. For the full year, he reiterated revenue of $11.95 billion to $12.05 billion, adjusted EPS of $11.05 to $11.25, cash from operations of about $1.8 billion, and capex of about $550 million, while saying operating margin should expand versus prior year.

Analysts focused on hospital demand, ACA exchange impacts, margin phasing, bad debt, pricing, DSO trends, PAMA, and oncology/Haystack adoption. Management said hospital reference and Co-Lab volumes remain strong with no slowdown, bad debt is not deteriorating, and pricing is broadly flattish; it also said ACA subsidy changes are still expected to be a 30-basis-point headwind for the year, though the business has not yet seen a major hit. On PAMA, management laid out three paths: CMS rate setting from the current data collection, passage of the RESULTS Act, or another delay, and said Quest will continue pushing for the RESULTS Act either way.