Quest Diagnostics Reports Third Quarter 2026 Financial Results;
Raises Revenue and EPS Guidance for Full Year 2026 • Third quarter revenues of $3.10 billion, up 10.0% from 2025, on strong organic revenue growth
• Third quarter reported diluted earnings per share ("EPS") of $2.78, up 28.7% from 2025; and adjusted diluted EPS of $3.00, up 15.4% from 2025
• Full year 2026 revenues now expected to be between $12.065 billion and $12.105 billion
• Full year 2026 reported diluted EPS now expected to be between $10.21 and $10.31; and adjusted diluted EPS expected to be between $11.25 and $11.35
SECAUCUS, N.J., October 22, 2026 - Quest Diagnostics Incorporated (NYSE: DGX), a leading provider of diagnostic information services, today announced financial results for the third quarter ended September 30, 2026.
“We delivered revenue growth of 10% and adjusted EPS growth of over 15% on continued strength across our physician, hospital and consumer channels, complemented by productivity gains from automation and AI,” said Jim Davis, Chairman, CEO and President. “Our robust organic revenue growth demonstrates that our solutions are fulfilling the expanding clinical care needs of an aging population as well as the increasing number of people focused on prevention and wellness. With these growth trends and our strong performance, we are raising our revenue and EPS guidance for the full year.”
• Announced the ability for iPhone and iPad users in the United States to conveniently purchase a tailored Quest laboratory test panel with over 50 biomarkers directly through the Apple Health app, available to the public later this year.
• Finalized a definitive agreement to acquire select outreach lab assets from a leading health system and long-time Co-Lab Solutions customer in the Northeastern U.S. Continued to advance our Co-Lab Solutions implementation and joint venture lab with Corewell Health in Michigan.
• Extended our AD-Detect® menu to include the FDA-cleared Roche Elecsys® Phospho-Tau (217P) Plasma (pTau217) blood test and launched a new AD-Detect test panel with pTau217, amyloid beta and APOE to help guide diagnosis and treatment decisions for Alzheimer’s disease.
• Advanced Project Nova from the design phase to the solutions-build phase and continue to expect to deploy Epic solutions in our first lab in the fall of 2027.
The company will hold its 2027 Investor Day on March 25, 2027, at the New York Stock Exchange. Additional information will be provided closer to the event. 1
(a) For further details impacting the year-over-year comparisons related to operating income, operating income as a percentage of net revenues, net income attributable to Quest Diagnostics, and diluted EPS, see note 2 of the financial tables attached below.
Updated Prior Guidance Guidance Low High Low High Net $12.065 $12.105 $11.95 $12.05 revenues billion billion billion billion Net revenues 9.3% 9.7% 8.3% 9.2% increase Reported $10.21 $10.31 $9.97 $10.17 diluted EPS Adjusted $11.25 $11.35 $11.05 $11.25 diluted EPS Cash Approximate… Approximate… provided by $1.90 $1.80 operations billion billion Capital Approximate… Approximate… expenditur… $550 million $550 million
As used in this press release the term “reported” refers to measures under accounting principles generally accepted in the United States (“GAAP”). The term “adjusted” refers to non-GAAP operating performance measures that exclude special items such as restructuring and integration charges, amortization expense, excess tax benefits ("ETB") associated with stock-based compensation, gains and losses associated with changes in the carrying value of our strategic investments and other items.
Non-GAAP adjusted measures are presented because management believes those measures are useful adjuncts to GAAP results. Non-GAAP adjusted measures should not be considered as an alternative to the corresponding measures determined under GAAP. Management may use these non-GAAP measures to evaluate our performance period over period and relative to competitors, to analyze the underlying trends in our business, to establish operational budgets and forecasts and for incentive compensation purposes. 2 We believe that these non-GAAP measures are useful to investors and analysts to evaluate our performance period over period and relative to competitors, as well as to analyze the underlying trends in our business and to assess our performance. The additional tables attached below include reconciliations of non-GAAP adjusted measures to GAAP measures.
Quest Diagnostics will hold its quarterly conference call to discuss financial results beginning at 8:30 a.m. Eastern Time today. The conference call can be accessed by dialing 888-455-0391 within the U.S. and Canada, or 773-756-0467 internationally, passcode: 7895081; or via live webcast on our website at www.QuestDiagnostics.com/investor. We suggest participants dial in approximately 10 minutes before the call.
A replay of the call may be accessed online at www.QuestDiagnostics.com/investor or, from approximately 10:30 a.m. Eastern Time on October 22, 2026 until midnight Eastern Time on November 5, 2026, by phone at 866-388-5361 for domestic callers or 203-369-0416 for international callers. Anyone listening to the call is encouraged to read our periodic reports, on file with the Securities and Exchange Commission, including the discussion of risk factors and historical results of operations and financial condition in those reports.
Quest Diagnostics works across healthcare to create a healthier world, one life at a time. We help connect people, from clinicians to consumers, with laboratory insights that illuminate a path to better health. With a focus on delivering smarter, simpler testing, our insights reveal new avenues to identify and treat disease, inspire healthy behaviors and improve healthcare management. Quest Diagnostics serves half the physicians and hospitals in the United States and one in three adult Americans each year, and our nearly 60,000 employees work together to deliver diagnostic insights that inspire actions to transform lives. www.QuestDiagnostics.com.
The statements in this press release which are not historical facts may be forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date that they are made and which reflect management’s current estimates, projections, expectations or beliefs and which involve risks and uncertainties that could cause actual results and outcomes to be materially different. Risks and uncertainties that may affect the future results of the company include, but are not limited to, the impact of the incident described in the Current Report on Form 8-K filed on October 22, 2026, uncertain and volatile economic conditions, adverse results from pending or future government investigations, lawsuits or private actions, the competitive environment, the complexity of billing, reimbursement and revenue recognition for clinical laboratory testing, changes in government policies, including related to trade, and regulations, changing relationships with customers, payers, suppliers or strategic partners, acquisitions and other factors discussed in the company's most recently filed Annual Report on Form 10-K and in any of the company's subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including those discussed in the “Business,” “Risk Factors,” “Cautionary Factors that May Affect Future Results” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those reports.
For further information: Wendy Bost, Quest Diagnostics (Media): 973-520-2800, Damini Chokshi, Quest Diagnostics (Investors): 973-520-2900
This earnings release, including the attached financial tables, is available online in the Newsroom section at www.QuestDiagnostics.com. ADDITIONAL TABLES FOLLOW
September 30, December 31, 2026 2025 ────────────────────────────────────────────────────────────────────────────── Assets Current assets: Cash and cash equivalents $ 797 $ 420 Accounts receivable, net 1,712 1,408 Inventories 218 189 Prepaid expenses and other current 390 361 assets Total current assets 3,117 2,378 Property, plant and equipment, net 2,275 2,203 Operating lease right-of-use assets 670 657 Goodwill 9,112 8,945 Intangible assets, net 1,634 1,636 Investments in equity method 139 136 investees Other assets 274 270 Total assets $ 17,221 $ 16,225 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable and accrued expenses $ 1,643 $ 1,600 Current portion of long-term debt 10 504 Current portion of long-term operating 181 174 lease liabilities Total current liabilities 1,834 2,278 Long-term debt 5,540 5,167 Long-term operating lease liabilities 554 537 Other liabilities 1,262 957 Redeemable noncontrolling interest 81 80 Stockholders’ equity: Quest Diagnostics stockholders’ equity: Common stock, par value $0.01 per share; 600 shares authorized as of both September 30, 2026 and December 31, 2 2 2025; 162 shares issued as of both September 30, 2026 and December 31, 2025 Additional paid-in capital 2,397 2,381 Retained earnings 10,593 9,994 Accumulated other comprehensive loss -66 -27 Treasury stock, at cost; 52 shares as of both September 30, 2026 and December -5,294 -5,180 31, 2025 Total Quest Diagnostics stockholders’ 7,632 7,170 equity Noncontrolling interests 318 36 Total stockholders’ equity 7,950 7,206 Total liabilities and stockholders’ $ 17,221 $ 16,225 equity
Nine Months Ended Cash flows from September 30, operating activities: 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net income $ 924 $ 790 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and 440 425 amortization Provision for credit 5 2 losses Deferred income tax 155 118 expense Stock-based compensation 63 63 expense Other, net 22 37 Changes in operating assets and liabilities: Accounts receivable -308 -153 Accounts payable and 244 113 accrued expenses Income taxes payable -24 -1 Other assets and -35 27 liabilities, net Net cash provided by operating 1,486 1,421 activities Cash flows from investing activities: Business acquisitions, net of cash -39 -51 acquired Capital expenditures -418 -369 Other investing 2 -20 activities, net Net cash used in -455 -440 investing activities Cash flows from financing activities: Proceeds from borrowings 494 410 Repayments of debt -504 -1,011 Purchases of treasury -252 -150 stock Exercise of stock 108 61 options Employee payroll tax withholdings on stock issued under -40 -44 stock-based compensation plans Dividends paid -279 -263 Distributions to noncontrolling interest -35 -43 partners Contributions from noncontrolling 25 — interest partners Other financing -169 -61 activities, net Net cash used in -652 -1,101 financing activities Effect of exchange rate changes on cash -2 3 and cash equivalents and restricted cash Net change in cash and cash equivalents 377 -117 and restricted cash Cash and cash equivalents and restricted 420 549 cash, beginning of period Cash and cash equivalents and $ 797 $ 432 restricted cash, end of period Cash paid during the period for: Interest $ 151 $ 167 Income taxes $ 142 $ 112
1) The computation of basic and diluted earnings per common share is as follows:
Three Months Ended September 30, Amounts 2026 Nine attribut… (in Months to Quest millions, Ended Diagnost… except September common per share 30, stockhol… data) 2025 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net income attribut… $ 312 $ 245 $ 884 $ 747 to Quest Diagnost… Less: earnings allocated 2 2 4 4 to particip… securiti… Earnings available to Quest Diagnost… common $ 310 $ 243 $ 880 $ 743 stockhol… - basic and diluted Weighted average common 110 112 110 112 shares outstand… - basic Effect of dilutive securiti… Stock options and 2 1 2 1 performa… share units Weighted average common 112 113 112 113 shares outstand… - diluted Earnings per share attribut… to Quest Diagnost… common stockhol… Basic $ 2.82 $ 2.18 $ 7.97 $ 6.66 Diluted $ 2.78 $ 2.16 $ 7.86 $ 6.57
2) The following tables reconcile reported GAAP results to non-GAAP adjusted results:
8 (a) For each of the three and nine months ended September 30, 2026 and 2025, the pre-tax impact represents costs primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business. The following table summarizes the pre-tax impact of restructuring and integration charges on our consolidated statements of operations:
(b) The three and nine months ended September 30, 2026 and 2025 include pre-tax losses associated with the change in the fair value of the contingent consideration accrual associated with previous acquisitions, recorded in other operating expense, net. Additionally, both the three and nine months ended September 30, 2025 include a $15 million pre-tax charge to earnings related to legal matters, recorded in other operating expense, net. Also, the three and nine months ended September 30, 2025 include pre-tax impairment charges of $5 million and $29 million, respectively, on certain long-lived assets related to the exit of a business, also recorded in other operating expense, net.
(c) For all periods presented, the pre-tax impact represents gains and losses associated with changes in the carrying value of our strategic investments, principally recorded in equity in earnings of equity method investees, net of taxes, and other (expense) income, net.
(d) Both the three and nine months ended September 30, 2026 primarily include $4 million of pre-tax gains, recorded in selling, general and administrative expenses, related to insurance recoveries for certain legal matters. The nine months ended September 30, 2025 includes a $46 million pre-tax gain, recorded in other operating expense, net, from a payroll tax credit under the Coronavirus Aid, Relief, and Economic Security Act associated with the retention of employees. Additionally, the nine months ended September 30, 2025 includes an $8 million pre-tax gain, recorded in equity in earnings of equity method investees, net of taxes, representing a non-recurring gain related to a lease.
(e) For restructuring and integration charges, other gains/charges, gains and losses on investments, and amortization expense, income tax impacts, where recorded, were primarily calculated using combined statutory income tax rates of 25.5% for both 2026 and 2025. No income tax impact was recorded on losses associated with the change in the fair value of the contingent consideration accrual associated with previous acquisitions.
3) The outlook for adjusted diluted EPS represents management’s estimates for the full year 2026 before the impact of special items. Further impacts to earnings related to special items may occur throughout 2026. Additionally, the amount of ETB is dependent upon employee stock option exercises and our stock price, which are difficult to predict. The following table reconciles our 2026 outlook for diluted EPS under GAAP to our outlook for adjusted diluted EPS:
(a) Represents estimated pre-tax charges of $20 million primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business. Income tax benefits were primarily calculated using a combined statutory income tax rate of 25.5%.
(b) Represents estimated pre-tax amortization expenses of $149 million. Income tax benefits were primarily calculated using a combined statutory income tax rate of 25.5%. 9 (c) Principally represents estimated pre-tax net losses of $9 million associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions. Such estimate is subject to the risks and uncertainties discussed in the "Forward Looking Statements" section above. No income tax benefits are recorded on the changes associated with the contingent consideration accrual.
(d) Represents gains and losses associated with changes in the carrying value of our strategic investments. Income tax impacts were calculated using a combined statutory income tax rate of 25.5%.
(e) Principally represents a pre-tax gain related to insurance recoveries for certain legal matters. Income tax impacts were primarily calculated using a combined statutory income tax rate of 25.5%. 10
Full text with the tables
Exhibit 99.1
Quest Diagnostics Reports Third Quarter 2026 Financial Results;
Raises Revenue and EPS Guidance for Full Year 2026
• Third quarter revenues of $3.10 billion, up 10.0% from 2025, on strong organic
revenue growth
• Third quarter reported diluted earnings per share ("EPS") of $2.78, up 28.7%
from 2025; and adjusted diluted EPS of $3.00, up 15.4% from 2025
• Full year 2026 revenues now expected to be between $12.065 billion and $12.105
billion
• Full year 2026 reported diluted EPS now expected to be between $10.21 and
$10.31; and adjusted diluted EPS expected to be between $11.25 and $11.35
SECAUCUS, N.J., October 22, 2026 - Quest Diagnostics Incorporated (NYSE: DGX), a
leading provider of diagnostic information services, today announced financial
results for the third quarter ended September 30, 2026.
“We delivered revenue growth of 10% and adjusted EPS growth of over 15% on
continued strength across our physician, hospital and consumer channels,
complemented by productivity gains from automation and AI,” said Jim Davis,
Chairman, CEO and President. “Our robust organic revenue growth demonstrates
that our solutions are fulfilling the expanding clinical care needs of an aging
population as well as the increasing number of people focused on prevention and
wellness. With these growth trends and our strong performance, we are raising
our revenue and EPS guidance for the full year.”
Recent Highlights:
• Announced the ability for iPhone and iPad users in the United States to
conveniently purchase a tailored Quest laboratory test panel with over 50
biomarkers directly through the Apple Health app, available to the public later
this year.
• Finalized a definitive agreement to acquire select outreach lab assets from a
leading health system and long-time Co-Lab Solutions customer in the
Northeastern U.S. Continued to advance our Co-Lab Solutions implementation and
joint venture lab with Corewell Health in Michigan.
• Extended our AD-Detect® menu to include the FDA-cleared Roche Elecsys®
Phospho-Tau (217P) Plasma (pTau217) blood test and launched a new AD-Detect test
panel with pTau217, amyloid beta and APOE to help guide diagnosis and treatment
decisions for Alzheimer’s disease.
• Advanced Project Nova from the design phase to the solutions-build phase and
continue to expect to deploy Epic solutions in our first lab in the fall of
2027.
The company will hold its 2027 Investor Day on March 25, 2027, at the New York
Stock Exchange. Additional information will be provided closer to the event.
1
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──────────────────────────────────────────────────────────────────────────────
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(a) For further details impacting the year-over-year comparisons related to
operating income, operating income as a percentage of net revenues, net income
attributable to Quest Diagnostics, and diluted EPS, see note 2 of the financial
tables attached below.
Updated Guidance for Full Year 2026
The company updates its full year 2026 guidance as follows:
Updated Prior
Guidance Guidance
Low High Low High
Net $12.065 $12.105 $11.95 $12.05
revenues billion billion billion billion
Net
revenues 9.3% 9.7% 8.3% 9.2%
increase
Reported $10.21 $10.31 $9.97 $10.17
diluted EPS
Adjusted $11.25 $11.35 $11.05 $11.25
diluted EPS
Cash Approximate… Approximate…
provided by $1.90 $1.80
operations billion billion
Capital Approximate… Approximate…
expenditur… $550 million $550 million
Note on Non-GAAP Financial Measures
As used in this press release the term “reported” refers to measures under
accounting principles generally accepted in the United States (“GAAP”). The term
“adjusted” refers to non-GAAP operating performance measures that exclude
special items such as restructuring and integration charges, amortization
expense, excess tax benefits ("ETB") associated with stock-based compensation,
gains and losses associated with changes in the carrying value of our strategic
investments and other items.
Non-GAAP adjusted measures are presented because management believes those
measures are useful adjuncts to GAAP results. Non-GAAP adjusted measures should
not be considered as an alternative to the corresponding measures determined
under GAAP. Management may use these non-GAAP measures to evaluate our
performance period over period and relative to competitors, to analyze the
underlying trends in our business, to establish operational budgets and
forecasts and for incentive compensation purposes.
2
We believe that these non-GAAP measures are useful to investors and analysts to
evaluate our performance period over period and relative to competitors, as well
as to analyze the underlying trends in our business and to assess our
performance. The additional tables attached below include reconciliations of
non-GAAP adjusted measures to GAAP measures.
Conference Call Information
Quest Diagnostics will hold its quarterly conference call to discuss financial
results beginning at 8:30 a.m. Eastern Time today. The conference call can be
accessed by dialing 888-455-0391 within the U.S. and Canada, or 773-756-0467
internationally, passcode: 7895081; or via live webcast on our website at
www.QuestDiagnostics.com/investor. We suggest participants dial in approximately
10 minutes before the call.
A replay of the call may be accessed online at www.QuestDiagnostics.com/investor
or, from approximately 10:30 a.m. Eastern Time on October 22, 2026 until
midnight Eastern Time on November 5, 2026, by phone at 866-388-5361 for domestic
callers or 203-369-0416 for international callers. Anyone listening to the call
is encouraged to read our periodic reports, on file with the Securities and
Exchange Commission, including the discussion of risk factors and historical
results of operations and financial condition in those reports.
About Quest Diagnostics
Quest Diagnostics works across healthcare to create a healthier world, one life
at a time. We help connect people, from clinicians to consumers, with laboratory
insights that illuminate a path to better health. With a focus on delivering
smarter, simpler testing, our insights reveal new avenues to identify and treat
disease, inspire healthy behaviors and improve healthcare management. Quest
Diagnostics serves half the physicians and hospitals in the United States and
one in three adult Americans each year, and our nearly 60,000 employees work
together to deliver diagnostic insights that inspire actions to transform lives.
www.QuestDiagnostics.com.
Forward Looking Statements
The statements in this press release which are not historical facts may be
forward-looking statements. Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date that they are made
and which reflect management’s current estimates, projections, expectations or
beliefs and which involve risks and uncertainties that could cause actual
results and outcomes to be materially different. Risks and uncertainties that
may affect the future results of the company include, but are not limited to,
the impact of the incident described in the Current Report on Form 8-K filed on
October 22, 2026, uncertain and volatile economic conditions, adverse results
from pending or future government investigations, lawsuits or private actions,
the competitive environment, the complexity of billing, reimbursement and
revenue recognition for clinical laboratory testing, changes in government
policies, including related to trade, and regulations, changing relationships
with customers, payers, suppliers or strategic partners, acquisitions and other
factors discussed in the company's most recently filed Annual Report on Form
10-K and in any of the company's subsequently filed Quarterly Reports on Form
10-Q and Current Reports on Form 8-K, including those discussed in the
“Business,” “Risk Factors,” “Cautionary Factors that May Affect Future Results”
and “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” sections of those reports.
For further information: Wendy Bost, Quest Diagnostics (Media): 973-520-2800,
Damini Chokshi, Quest Diagnostics (Investors): 973-520-2900
This earnings release, including the attached financial tables, is available
online in the Newsroom section at www.QuestDiagnostics.com.
ADDITIONAL TABLES FOLLOW
3
Quest Diagnostics Incorporated and Subsidiaries
Consolidated Statements of Operations
For the Three and Nine
Months Ended September 30, 2026 and 2025
(in millions, except per share data)
(unaudited)
Three Nine
Months Months
Ended Ended
September September
2026 30, 2025 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Net $ 3,097 $ 2,816 $ 9,035 $ 8,229
revenues
Operati…
costs
and
expenses
and
other
operati…
income:
Cost of 2,055 1,867 6,024 5,474
services
Selling,
general 523 501 1,556 1,463
and
adminis…
Amortiz…
of 37 39 112 117
intangi…
assets
Other
operati… 3 23 6 5
expense,
net
Total
operati…
costs 2,618 2,430 7,698 7,059
and
expense…
net
Operati… 479 386 1,337 1,170
income
Other
income
(expens…
Interest
expense, -61 -66 -187 -200
net
Other
(expens… -2 8 12 18
income,
net
Total
non-ope… -63 -58 -175 -182
expense,
net
Income
before
income
taxes
and
equity 416 328 1,162 988
in
earnings
of
equity
method
investe…
Income
tax -99 -77 -261 -233
expense
Equity
in
earnings
of
equity 9 8 23 35
method
investe…
net of
taxes
Net 326 259 924 790
income
Less:
Net
income
attribu… 14 14 40 43
to
noncont…
interes…
Net
income
attribu… $ 312 $ 245 $ 884 $ 747
to Quest
Diagnos…
Earnings
per
share
attribu…
to Quest
Diagnos…
common
stockho…
Basic $ 2.82 $ 2.18 $ 7.97 $ 6.66
Diluted $ 2.78 $ 2.16 $ 7.86 $ 6.57
Weighted
average
common
shares
outstan…
Basic 110 112 110 112
Diluted 112 113 112 113
4
Quest Diagnostics Incorporated and Subsidiaries
Consolidated Balance Sheets
September 30, 2026 and December 31, 2025
(in millions, except per share data)
(unaudited)
September 30, December 31,
2026 2025
──────────────────────────────────────────────────────────────────────────────
Assets
Current assets:
Cash and cash equivalents $ 797 $ 420
Accounts receivable, net 1,712 1,408
Inventories 218 189
Prepaid expenses and other current 390 361
assets
Total current assets 3,117 2,378
Property, plant and equipment, net 2,275 2,203
Operating lease right-of-use assets 670 657
Goodwill 9,112 8,945
Intangible assets, net 1,634 1,636
Investments in equity method 139 136
investees
Other assets 274 270
Total assets $ 17,221 $ 16,225
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses $ 1,643 $ 1,600
Current portion of long-term debt 10 504
Current portion of long-term
operating 181 174
lease liabilities
Total current liabilities 1,834 2,278
Long-term debt 5,540 5,167
Long-term operating lease liabilities 554 537
Other liabilities 1,262 957
Redeemable noncontrolling interest 81 80
Stockholders’ equity:
Quest Diagnostics stockholders’
equity:
Common stock, par value $0.01 per
share;
600 shares authorized as of both
September 30, 2026 and December 31, 2 2
2025; 162 shares issued as of both
September 30, 2026 and December 31,
2025
Additional paid-in capital 2,397 2,381
Retained earnings 10,593 9,994
Accumulated other comprehensive loss -66 -27
Treasury stock, at cost; 52 shares as
of
both September 30, 2026 and December -5,294 -5,180
31,
2025
Total Quest Diagnostics stockholders’ 7,632 7,170
equity
Noncontrolling interests 318 36
Total stockholders’ equity 7,950 7,206
Total liabilities and stockholders’ $ 17,221 $ 16,225
equity
5
1486Quest Diagnostics Incorporated and Subsidiaries
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2026 and 2025
(in millions)
(unaudited)
Nine Months Ended
Cash flows from September 30,
operating activities: 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net income $ 924 $ 790
Adjustments to reconcile
net income to
net cash provided by
operating
activities:
Depreciation and 440 425
amortization
Provision for credit 5 2
losses
Deferred income tax 155 118
expense
Stock-based compensation 63 63
expense
Other, net 22 37
Changes in operating
assets and
liabilities:
Accounts receivable -308 -153
Accounts payable and 244 113
accrued expenses
Income taxes payable -24 -1
Other assets and -35 27
liabilities, net
Net cash provided by
operating 1,486 1,421
activities
Cash flows from
investing activities:
Business acquisitions,
net of cash -39 -51
acquired
Capital expenditures -418 -369
Other investing 2 -20
activities, net
Net cash used in -455 -440
investing activities
Cash flows from
financing activities:
Proceeds from borrowings 494 410
Repayments of debt -504 -1,011
Purchases of treasury -252 -150
stock
Exercise of stock 108 61
options
Employee payroll tax
withholdings on
stock issued under -40 -44
stock-based
compensation plans
Dividends paid -279 -263
Distributions to
noncontrolling interest -35 -43
partners
Contributions from
noncontrolling 25 —
interest partners
Other financing -169 -61
activities, net
Net cash used in -652 -1,101
financing activities
Effect of exchange rate
changes on cash -2 3
and cash equivalents and
restricted cash
Net change in cash and
cash equivalents 377 -117
and restricted cash
Cash and cash
equivalents and
restricted 420 549
cash, beginning of
period
Cash and cash
equivalents and $ 797 $ 432
restricted
cash, end of period
Cash paid during the
period for:
Interest $ 151 $ 167
Income taxes $ 142 $ 112
6
Notes to Financial Tables
1) The computation of basic and diluted earnings per common share is as follows:
Three
Months
Ended
September
30,
Amounts 2026 Nine
attribut… (in Months
to Quest millions, Ended
Diagnost… except September
common per share 30,
stockhol… data) 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net
income
attribut… $ 312 $ 245 $ 884 $ 747
to Quest
Diagnost…
Less:
earnings
allocated 2 2 4 4
to
particip…
securiti…
Earnings
available
to Quest
Diagnost…
common $ 310 $ 243 $ 880 $ 743
stockhol…
- basic
and
diluted
Weighted
average
common 110 112 110 112
shares
outstand…
- basic
Effect of
dilutive
securiti…
Stock
options
and 2 1 2 1
performa…
share
units
Weighted
average
common 112 113 112 113
shares
outstand…
- diluted
Earnings
per share
attribut…
to Quest
Diagnost…
common
stockhol…
Basic $ 2.82 $ 2.18 $ 7.97 $ 6.66
Diluted $ 2.78 $ 2.16 $ 7.86 $ 6.57
2) The following tables reconcile reported GAAP results to non-GAAP adjusted
results:
Th…
Mo…
En…
Se…
30,
20…
──────────────────────────────────────────────────────────────────────────────
-d…
in
mi…
ex…
per
sh…
da…
Equ…
Op… in
in… ear… Net
as In… of in…
Op… a tax equ… at… Dil…
in… pe… ex… met… to EPS
of (e) inv… Qu…
net net Di…
re… of
tax…
As $ 479 15… % $ -99 $ 9 $ 312 $ 2.…
r…
R…
a…
i… 3 0.1 — — 3 0.…
c…
(…
O…
c… 4 0.1 — — 4 0.…
(…
G…
a…
l… — — -1 1 3 0.…
on
i…
(…
O…
g… -6 -0… 1 — -5 -0…
(…
A… 37 1.2 -10 — 27 0.…
e…
E… — — -6 — -6 -0…
As $ 517 16… % $ -1… $ 10 $ 338 $ 3.…
a…
7
Ni…
Mo…
En…
Se…
30,
20…
──────────────────────────────────────────────────────────────────────────────
-d…
in
mi…
ex…
per
sh…
da…
Equ…
Op… in
in… ear… Net
as In… of in…
Op… a tax equ… at… Dil…
in… pe… ex… met… to EPS
of (e) inv… Qu…
net net Di…
re… of
tax…
As $ 1,… 14… % $ -2… $ 23 $ 884 $ 7.…
r…
R…
a…
i… 14 0.2 -3 — 11 0.…
c…
(…
O…
c… 9 0.1 — — 9 0.…
(…
G…
a…
l… — — -3 7 7 0.…
on
i…
(…
O…
g… -6 -0… 1 — -5 -0…
(…
A… 112 1.2 -29 — 83 0.…
e…
E… — — -20 — -20 -0…
As $ 1,… 16… % $ -3… $ 30 $ 969 $ 8.…
a…
Th…
Mo…
En…
Se…
30,
20…
──────────────────────────────────────────────────────────────────────────────
-d…
in
mi…
ex…
per
sh…
da…
Equ…
Op… in
in… ear… Net
as In… of in…
Op… a tax equ… at… Dil…
in… pe… ex… met… to EPS
of (e) inv… Qu…
net net Di…
re… of
tax…
As $ 386 13.7 % $ -77 $ 8 $ 245 $ 2.…
r…
R…
a…
i… 11 0.4 -2 — 9 0.…
c…
(…
O…
c… 22 0.8 -6 — 16 0.…
(…
A… 39 1.4 -10 — 29 0.…
e…
E… — — -3 — -3 -0…
As $ 458 16.3 % $ -98 $ 8 $ 296 $ 2.…
a…
Ni…
Mo…
En…
Se…
30,
20…
──────────────────────────────────────────────────────────────────────────────
-d…
in
mi…
ex…
per
sh…
da…
Equ…
Op… in
in… ear… Net
as In… of in…
Op… a tax equ… at… Dil…
in… pe… ex… met… to EPS
of (e) inv… Qu…
net net Di…
re… of
tax…
As $ 1,… 14… % $ -2… $ 35 $ 747 $ 6.…
r…
R…
a…
i… 37 0.5 -9 — 28 0.…
c…
(…
O…
c… 52 0.6 -12 — 40 0.…
(…
G…
a…
l… — — 1 -1 -2 -0…
on
i…
(…
O…
g… -46 -0… 14 -8 -40 -0…
(…
A… 117 1.4 -30 — 87 0.…
e…
E… — — -15 — -15 -0…
As $ 1,… 16… % $ -2… $ 26 $ 845 $ 7.…
a…
8
(a) For each of the three and nine months ended September 30, 2026 and 2025, the
pre-tax impact represents costs primarily associated with workforce reductions
and integration costs incurred in connection with further restructuring and
integrating our business. The following table summarizes the pre-tax impact of
restructuring and integration charges on our consolidated statements of
operations:
Three Months
Ended Nine Months
September 30, Ended
2026 September
(dollars in 30,
millions) 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Cost of $ 1 $ 1 $ 3 $ 8
services
Selling,
general and 2 10 11 29
administrat…
Operating $ 3 $ 11 $ 14 $ 37
income
(b) The three and nine months ended September 30, 2026 and 2025 include pre-tax
losses associated with the change in the fair value of the contingent
consideration accrual associated with previous acquisitions, recorded in other
operating expense, net. Additionally, both the three and nine months ended
September 30, 2025 include a $15 million pre-tax charge to earnings related to
legal matters, recorded in other operating expense, net. Also, the three and
nine months ended September 30, 2025 include pre-tax impairment charges of $5
million and $29 million, respectively, on certain long-lived assets related to
the exit of a business, also recorded in other operating expense, net.
(c) For all periods presented, the pre-tax impact represents gains and losses
associated with changes in the carrying value of our strategic investments,
principally recorded in equity in earnings of equity method investees, net of
taxes, and other (expense) income, net.
(d) Both the three and nine months ended September 30, 2026 primarily include $4
million of pre-tax gains, recorded in selling, general and administrative
expenses, related to insurance recoveries for certain legal matters. The nine
months ended September 30, 2025 includes a $46 million pre-tax gain, recorded in
other operating expense, net, from a payroll tax credit under the Coronavirus
Aid, Relief, and Economic Security Act associated with the retention of
employees. Additionally, the nine months ended September 30, 2025 includes an $8
million pre-tax gain, recorded in equity in earnings of equity method investees,
net of taxes, representing a non-recurring gain related to a lease.
(e) For restructuring and integration charges, other gains/charges, gains and
losses on investments, and amortization expense, income tax impacts, where
recorded, were primarily calculated using combined statutory income tax rates of
25.5% for both 2026 and 2025. No income tax impact was recorded on losses
associated with the change in the fair value of the contingent consideration
accrual associated with previous acquisitions.
3) The outlook for adjusted diluted EPS represents management’s estimates for
the full year 2026 before the impact of special items. Further impacts to
earnings related to special items may occur throughout 2026. Additionally, the
amount of ETB is dependent upon employee stock option exercises and our stock
price, which are difficult to predict. The following table reconciles our 2026
outlook for diluted EPS under GAAP to our outlook for adjusted diluted EPS:
Low High
────────────────────────────────────────────────────────────────────
Diluted EPS $ 10.21 $ 10.31
Restructuring and integration charges 0.13 0.13
(a)
Amortization expense (b) 0.99 0.99
Other charges (c) 0.11 0.11
Gains and losses on investments (d) 0.06 0.06
Other gains (e) -0.04 -0.04
ETB -0.21 -0.21
Adjusted diluted EPS $ 11.25 $ 11.35
(a) Represents estimated pre-tax charges of $20 million primarily associated
with workforce reductions and integration costs incurred in connection with
further restructuring and integrating our business. Income tax benefits were
primarily calculated using a combined statutory income tax rate of 25.5%.
(b) Represents estimated pre-tax amortization expenses of $149 million. Income
tax benefits were primarily calculated using a combined statutory income tax
rate of 25.5%.
9
(c) Principally represents estimated pre-tax net losses of $9 million associated
with the increase in the fair value of the contingent consideration accrual
associated with previous acquisitions. Such estimate is subject to the risks and
uncertainties discussed in the "Forward Looking Statements" section above. No
income tax benefits are recorded on the changes associated with the contingent
consideration accrual.
(d) Represents gains and losses associated with changes in the carrying value of
our strategic investments. Income tax impacts were calculated using a combined
statutory income tax rate of 25.5%.
(e) Principally represents a pre-tax gain related to insurance recoveries for
certain legal matters. Income tax impacts were primarily calculated using a
combined statutory income tax rate of 25.5%.
10