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    LH
    Earnings call· Jun 2026(Q2 FY26)

    LABCORP HOLDINGS Q2 FY26 earnings call LH

    Jul 30, 2026 Source

    Executive summary

    Labcorp Q2 FY26 — Strong Revenue Growth and Raised Full-Year Guidance

    Labcorp delivered a robust second quarter, marked by solid revenue growth and significant margin expansion across both Diagnostics and Biopharma Laboratory Services segments. The company raised its full-year revenue and adjusted EPS guidance, driven by strong organic performance, strategic acquisitions, and operating efficiencies. Labcorp continues to advance its strategic priorities, focusing on specialty testing, health system partnerships, and leveraging technology to enhance customer experience and productivity, while actively managing capital deployment.

    Highlights

    5

    • Enterprise revenue grew 6% to $3.7 billion in Q2 FY26.

    • Adjusted earnings per share grew 15% to $4.99 in Q2 FY26.

    • Adjusted operating margin expanded 70 basis points to 15.8% in Q2 FY26.

    • Biopharma Laboratory Services (BLS) revenue increased 6.5% to $836 million, with a strong Q2 book-to-bill of 1.14.

    • Full-year 2026 enterprise revenue guidance midpoint raised by $42 million, now expecting 5.4%-6.3% growth.

    Concerns

    2

    • Free cash flow was $314 million, down from $543 million last year, primarily due to working capital timing and planned increases in capital expenditures.

    • ACA changes are expected to have a 30 basis point impact on Diagnostics segment volume for full-year 2026, with a slight headwind of 20-30 basis points in Q2 FY26.

    Guidance & targets

    10
    CategoryTargetConfidence
    Full-year 2026 Enterprise Revenue Growth
    5.4% to 6.3%
    high materiality
    High
    Full-year 2026 Adjusted EPS
    $18.10 to $18.55
    high materiality
    High
    Full-year 2026 Diagnostics Segment Revenue Growth
    5.3% to 6%
    medium materiality
    High
    Full-year 2026 BLS Segment Revenue Growth
    5.5% to 6.5%
    medium materiality
    High
    Full-year 2026 Central Labs Revenue Growth (organic constant currency)
    mid-single digits
    medium materiality
    High
    Full-year 2026 Early Development Revenue Growth (organic constant currency)
    low single digits
    medium materiality
    High
    Full-year 2026 Enterprise Margin Expansion
    expansion
    high materiality
    High
    Full-year 2026 Free Cash Flow
    $1.24 billion to $1.36 billion
    high materiality
    High
    Full-year 2026 Capital Expenditures
    approximately 4% revenue
    medium materiality
    High
    Full-year 2026 Adjusted Tax Rate
    approximately 23%
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Diagnostics
    Strong quarter with organic growth and operating efficiencies driving margin expansion. Specialty testing areas delivered double-digit growth in the first half of the year.
    Organic revenue growth: 3.6%Volume growth: 3%Price/mix contribution: 2.5%Organic volume growth: 1.8%Organic favorable price mix: 1.8%Revenue from acquisitions contribution: 1.9%Acquisition volume growth: 1.3%Acquisition favorable price mix: 0.6%Adjusted operating income: $523 millionAdjusted operating margin expansion: 50 basis points
    		$2.9 billion5.5%—18.0%
    Biopharma Laboratory Services (BLS)
    Strong performance driven by Central Labs and benefits from strategic actions in early development. Margin expansion due to organic growth and operating efficiencies.
    Organic constant currency revenue growth: 6.2%Foreign currency translation benefit: 1.8%Early development strategic actions impact: -1.4%Central Labs Services organic constant currency revenue growth: 7.6%Early Development organic constant currency revenue growth: 2.7%Adjusted operating income: $142 millionAdjusted operating margin expansion: 130 basis pointsBacklog: $8.7 billionBacklog conversion to revenue (next 12 months): $2.7 billionQuarterly book-to-bill: 1.14Trailing 12-month book-to-bill: 1.03
    		$836 million6.5%—17.0%

    Operational metrics

    21
    Adjusted Operating Margin
    15.8%up 70 basis points YoY
    Q2 FY26

    Primarily driven by organic revenue growth.

    Adjusted Operating Margin
    17.6%
    Q2 FY25

    Prior year comparison for Diagnostics segment.

    Adjusted Operating Margin
    15.7%
    Q2 FY25

    Prior year comparison for BLS segment.

    Cash and Investments Balance
    $142 million
    Q2 FY26

    After retiring $500 million in senior notes.

    Total Debt
    $5.9 billion
    Q2 FY26

    After retiring $500 million in senior notes.

    Share Repurchase Authorization
    $1.4 billionincreased by $1 billion
    Q2 FY26

    Board of Directors approved an increase of $1 billion in July.

    Shares Repurchased
    $354 million
    Q2 FY26

    Executed in Q2 FY26.

    Dividends Paid
    $59 million
    Q2 FY26

    Paid in Q2 FY26.

    Senior Notes Retired
    $500 million
    Q2 FY26

    Retired in Q2 FY26.

    Organic Revenue Growth
    4.2%
    Q2 FY26

    Excludes impact from acquisitions, divestitures, and currency.

    Net Acquisitions Contribution to Revenue Growth
    1.2%
    Q2 FY26

    Contributed to enterprise revenue growth.

    Foreign Currency Translation Contribution to Revenue Growth
    0.4%
    Q2 FY26

    Contributed to enterprise revenue growth.

    Adjusted Tax Rate
    23%in line with last year
    Q2 FY26

    Also the expectation for the full year adjusted tax rate.

    Specialty Testing Revenue Growth
    double-digit growth
    H1 FY26

    Collectively, these specialty areas delivered double-digit revenue growth in the first half of the year.

    Tests per Accession Growth
    consistent and slight growth
    quarter in and quarter out

    A majority contributor to price/mix improvement. Supported by structural factors and strategic focus on specialty testing.

    Labcorp OnDemand Revenue Growth
    strong double-digit growthversus last year
    Q2 FY26

    Driven by increasing demand for consumer-initiated testing.

    ACA Impact on Diagnostics Volume
    20 to 30 basis pointsslight headwind
    Q2 FY26

    Full-year 2026 estimate remains 30 basis points.

    Bad Debt as Percentage of Revenue
    in line with prior year as well as historical benchmarks
    Q2 FY26

    Despite higher patient responsibility, bad debt remains consistent.

    RFP Strength (Early Development)
    remain strong
    Q2 FY26

    Not increased significantly, but consistently strong.

    Win Rate (Early Development)
    very consistent
    Q2 FY26

    Market share has remained consistent for quite some time.

    Study Starts Timeliness (Early Development)
    a bit more on timehistorically delayed
    Q2 FY26

    Helping performance in H1 and confidence for H2.

    Industry KPIs

    3
    MetricValueDetails
    Utilization trends3%%
    Segment revenue operating income$836 millionUSD
    Adjusted EPS EBITDA leverage guidance$4.99USD

    Product announcements

    8
    ProductTypeDetails
    ColoSenselaunch
    Roche's FDA-approved companion diagnosticexpansion
    Advanced DPYD genotyping testlaunch
    myOLARIS-KTdxexpansion
    NASHnxtupdate
    Marker by Labcorp Genetic Health Panellaunch
    Canada's first at-home self-collection test for women's fertility-related hormoneslaunch
    MyLabcorp applaunch

    Deals & partnerships

    4
    Parkview HealthAcquisition of select Outreach Laboratory Services

    Completed the acquisition of select Outreach Laboratory Services from Parkview Health in Indiana and Ohio.

    Tribal DiagnosticsAcquisition of a clinical laboratory

    Completed the acquisition of Tribal Diagnostics, a clinical laboratory serving communities in Oklahoma and Texas.

    Department of DefenseContract to provide laboratory testing

    Awarded a Department of Defense contract to provide laboratory testing for service members and their families across military hospitals worldwide.

    EpicBroadened cooperation to integrate diagnostic tests into Epic's Aura platform

    Broadened cooperation with Epic, which will make Labcorp's 6,500-plus diagnostic tests available on Epic's Aura platform, making it easier for healthcare providers to access tests.

    Risks & headwinds

    3
    ACA changes impact on Diagnostics volumeFull-year 2026

    30 basis points for full-year 2026; 20-30 basis points headwind in Q2 FY26

    Mitigation: Monitoring closely and managing appropriately; affected cohort is a very small percentage (less than 4-5%) of total diagnostic volume.

    PAMA implementationNext year (FY27)

    Potential impact on lab reimbursement

    Mitigation: Advocating for the RESULTS Act with bipartisan support; exploring options for another delay of PAMA; planning for strong execution if PAMA occurs.

    Free cash flow reductionQ2 FY26

    Q2 FY26 FCF $314 million vs $543 million last year

    Mitigation: Primarily due to working capital timing and planned increases in capital expenditures; full-year FCF guidance maintained at $1.24B-$1.36B.

    What to watch in Q3 FY26

    4

    PAMA data submission insights

    October time frame
    CurrentSubmission deadline July 31st
    TargetInsight into total submissions and potential impact

    Why it matters

    Understanding the breadth of data submissions will inform the likelihood and impact of PAMA implementation, which could significantly affect lab reimbursement.

    We probably won't have significant insight into how many other laboratories submitted their data until October time frame. So stay tuned⏳ for that.

    Q&A highlights

    5

    Can you elaborate on the drivers of strong organic growth, particularly specialty testing, and the underlying utilization trends? Also, what is the anticipated headwind from ACA/Medicaid changes in your guidance?

    Diagnostics had strong organic growth of 3.6%, driven by specialty businesses like oncology and neurology growing faster than routine testing. Specialty patients tend to have more tests per accession. The 30 basis point impact from ACA on Diagnostics segment volume for FY26 is maintained in guidance, with Q2 seeing a slight 20-30 basis point headwind. The affected cohort is less than 4-5% of total diagnostic volume.

    “The organic growth was 3.6% and then just under 2% was due to acquisitions. If you take a further look, the volume growth was also good at 3%, with the majority of that volume growth coming from organic growth.”

    asked by Lisa Gill · answered by Adam Schechter

    2 min read5 chapters

    Detailed Narrative

    01

    Specialty Testing Leadership and Portfolio Expansion

    Labcorp demonstrated strong leadership in specialty testing, with oncology, neurology, autoimmune disease, and women's health collectively delivering double-digit revenue growth in the first half of the year. The company expanded its oncology portfolio with the nationwide launch of ColoSense for colorectal cancer screening, a clinical trial collaboration for Plasma Detect Genome MRD in lung cancer, and expanded access to Roche's companion diagnostic for prostate cancer. Additionally, new tests for kidney transplant surveillance (myOLARIS-KTdx) and liver disease (NASHnxt, MVX, NIS2+) were introduced or gained Medicare coverage, supporting earlier detection and improved patient outcomes.

    02

    Strategic Partnerships and Acquisitions

    Labcorp continued to strengthen its position as a partner of choice for health systems and regional laboratories. The company completed the acquisition of select Outreach Laboratory Services from Parkview Health in Indiana and Ohio, and Tribal Diagnostics in Oklahoma and Texas. These acquisitions, along with being awarded a Department of Defense contract, contribute to a robust pipeline of deals aimed at supporting long-term growth. Management emphasized that these partnerships provide greater access to Labcorp's high-quality, cost-effective services and broad testing portfolio.

    03

    Consumer Health and Digital Innovation

    The consumer business achieved strong double-digit growth, driven by increasing demand for consumer-initiated testing and innovative digital offerings. Key initiatives include the launch of the Marker by Labcorp Genetic Health Panel through Labcorp OnDemand, offering combined biomarker and genetic testing. The company also introduced Canada's first at-home self-collection test for women's fertility hormones and launched the AI-powered MyLabcorp app, which has seen millions of downloads, enhancing patient experience through streamlined appointments and test result access.

    04

    Technology and Productivity Enhancements

    Labcorp is leveraging technology and AI to improve customer experience, enhance productivity, and transform its business. A broadened cooperation with Epic makes Labcorp's 6,500+ diagnostic tests available on Epic's Aura platform, simplifying access for healthcare providers. Enhancements to patient service centers, including expanded appointment availability and proactive reminders, further streamline the patient journey. These innovations contribute to the company's strategic priorities and were recognized by TIME and the Wall Street Journal for impact and innovation.

    05

    Capital Allocation and Financial Strength

    The company remains active in capital deployment, investing $226 million in acquisitions, repurchasing $354 million of shares, and paying $59 million in dividends during the quarter. Labcorp also retired $500 million in senior notes. The Board approved a $1 billion increase in the share repurchase authorization, bringing the total outstanding to $1.4 billion, demonstrating confidence in future cash generation and commitment to shareholder returns. The company ended the quarter with $142 million in cash and $5.9 billion in total debt.

    AI-generated summary of the company’s earnings call. Not investment advice.