Strong Revenue Growth
Consolidated revenues of $2.9 billion, up 9.2% year-over-year; consolidated organic revenue growth of 9.0% in Q1.
Quest Diagnostics
· DGX
April 21st, 2026
Summary
- Earnings Call Date:
- 2026-04-21
- Change Since:
- -0.94%
- Next Earnings Date:
- 2026-07-23
Earnings Call Sentiment
PositiveThe call reported broadly strong commercial and operational performance: double-digit volume growth, ~9% organic revenue growth, margin expansion on an adjusted basis, AI/automation-driven productivity gains, and raised full‑year guidance. Near-term headwinds include mix-driven revenue-per-requisition pressure from large collaboration ramps, lower Q1 cash flow, wage/weather/fuel cost impacts, Project Nova investment dilution, and ongoing regulatory/Medicare rate uncertainty. Overall, the positives (revenue/volume growth, EPS improvement, strategic partnerships and productivity gains) outweigh the described challenges.
Company Guidance
Quest raised full-year 2026 guidance to revenues of $11.78–$11.90 billion (growth 6.8%–7.8%), reported EPS $9.58–$9.78 and adjusted EPS $10.63–$10.83; cash from operations ~ $1.75 billion; capital expenditures ~ $550 million; share count and interest expense assumed consistent with 2025; operating margin expected to expand and guidance excludes prospective M&A. Management embedded contributions from Corewell (~$250M) and Fresenius (~$80–$100M) — together ~3.3% of revenue in the guide — and noted Project Nova dilution of ~$0.25 in 2026 (with >60% of Nova expenses in H2 and first wave rollout in fall 2027), an embedded fuel headwind of $7M–$10M (~$0.05–$0.07 EPS), and a continued Invigorate target of ~3% annual cost savings; the raise is supported by Q1 results (Q1 revenue $2.9B, +9.2%; organic revenue +9%; Q1 adjusted EPS $2.50, ~13% growth; adjusted operating margin 15.4%; total volume +10.9%).
Volume Expansion
Total requisitions increased 10.9% year-over-year with organic volume up 10.8%; contribution from Fresenius Medical Care and Corewell Health was approximately 7% of organic volume (organic volume ex these relationships = 3.8%).
Improved Profitability and EPS
Reported operating income of $399 million (13.8% of revenues) vs $346 million (13.0%) prior year; adjusted operating income $447 million (15.4% of revenues) vs $406 million (15.3%); reported EPS $2.24 vs $1.94 prior year and adjusted EPS $2.50 vs $2.21 (adjusted EPS growth ~13%).
Raised Full-Year Guidance
Updated 2026 guidance: revenues $11.78B–$11.90B (growth 6.8%–7.8%); reported EPS $9.58–$9.78; adjusted EPS $10.63–$10.83; cash from operations ≈ $1.75B; capex ≈ $550M. Guidance excludes contributions from prospective M&A and expects operating margin expansion.
Consumer Channel Momentum
Direct-to-consumer (questhealth.com) grew strongly (management cited 'high‑20s' percentage growth); consumer partnerships produced even stronger growth, with robust double-digit customer repeat rates and demand for new profiles (Elite, autoimmune, hormone tests).
Advanced Diagnostics Outperformance
Double-digit revenue growth across key advanced diagnostics areas (brain health, cardiometabolic/endocrine, autoimmune, oncology, women’s health); AD-Detect Alzheimer's testing more than doubled year-over-year; growth in Lp(a) and ApoB testing following new AHA guidelines.
Operational Productivity Gains via AI and Automation
Productivity increases credited to automation and AI: 40% productivity improvement among customer service agents using AI triage; Quest AI Companion reached ~350,000 patient engagements since launch; Invigorate program targeted to deliver ~3% annual cost savings.
Strategic Collaborations and Capacity Investments
Key collaborations (Corewell Health Co-Lab, Fresenius Medical Care) driving volume and planned expansion (state-of-the-art lab in Southeast Michigan); capital plan includes ~$550M capex with significant portion toward esoteric lab capacity to support advanced diagnostics growth.
Operator
Welcome to the Quest Diagnostics First Quarter 2026 Conference Call. At the request of the company, this call is being recorded. The entire contents of this call, including the presentation and question-and-answer session that will follow are the copyrighted property of Quest Diagnostics with all rights reserved. Any redistribution, retransmission or rebroadcast of this call in any form without written consent of Quest Diagnostics is strictly prohibited. Now I'd like to turn the conference over to Dan Haemmerle, Interim Vice President of Investor Relations for Quest Diagnostics. Please go ahead.
Dan Haemmerle
Thank you, and good morning. I'm joined by Jim Davis, our Chairman, Chief Executive Officer and President; and Sam Samad, our Chief Financial Officer. During this call, we may make forward-looking statements and will discuss non-GAAP measures. We provide a reconciliation of non-GAAP measures to comparable GAAP measures in the tables to our earnings press release. Actual results may differ materially from those projected. Risks and uncertainties that may affect Quest Diagnostics' future results include, but are not limited to, those described in our most recent annual report on Form 10-K and subsequently quarterly filed reports on Form 10-Q and current reports on Form 8-K. For this call, references to reported EPS refer to reported diluted EPS and references to adjusted EPS refer to adjusted diluted EPS. Growth rates associated with our long-term outlook projections, including consolidated revenue growth, revenue growth from acquisitions, organic revenue growth and adjusted earnings ...
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