01—Abstract
Summary
Summary of the 10-K filed February 26, 2026. Cited figures are marked; the original filing is the authoritative source.
Quest Diagnostics (DGX) reported 2025 net revenues of $11.0 billiona, up 11.8% year over year, with organic growth of 5.3%.
Operating income rose 15.6% to $1.56 billionb, and diluted EPS increased 13.8% to $8.75. Growth was driven largely by acquisitions, including Spectra Laboratories assets and the full-year contribution of LifeLabs, which together added roughly 6.7% to DIS revenue. Organic requisition volume grew 3.4%, while revenue per requisition rose only 0.1% (2.4% organic), reflecting lower-revenue LifeLabs volume.
Operating cash flow improved to $1.89 billionc from $1.33 billion, aided partly by lower cash taxes from the OBBBA and a CARES Act payroll tax credit, and capital expenditures rose to $527 million. Capital returns were expanded. The Board raised the quarterly dividend 7.5% to $0.86 and added $1 billion to the buyback authorization, bringing remaining capacity to $1.4 billion.
Total debt stood at about $5.7 billiond, with $500 million of 3.45% notes due June 2026 and about $1.3 billion of undrawn credit capacity. Management guides to roughly $550 million of 2026 capex and about $60 million of Project Nova spending that year. Key risks for investors include continued Medicare reimbursement pressure under PAMA, the anticipated effect of OBBBA and expiring enhanced ACA premium tax credits (estimated at up to 50-60 basis points of revenue pressure by 2028), growing health plan utilization management, and the execution risk of the multi-year Project Nova and Invigorate programs.
Ongoing legal and government investigations, including a Corporate Integrity Agreement with HHS, also remain relevant. The company also disclosed a $29 million impairment tied to a business exit and a $154 million amortization charge. The company is valued on a reasonable basis, but it carries meaningful reimbursement and integration risk.
02—Key points
Key Highlights
- Net revenues of $11.035B in 2025, up 11.8% YoY; organic growth 5.3%, with acquisitions (LifeLabs, Spectra) contributing the balance.
- Operating income of $1.556B (+15.6%); operating margin expanded to 14.1% from 13.6%.
- Diluted EPS of $8.75 (+13.8%), though 2025 results include a net $1.10 per-share drag from amortization, restructuring, impairment, and legal charges partly offset by one-time gains.
- Operating cash flow of $1.886B (+41%), supported by lower cash taxes from the OBBBA; capex rose to $527M.
- Shareholder returns: quarterly dividend raised 7.5% to $0.86; $1B buyback authorization added, bringing total capacity to $1.4B.
- Organic requisition volume +3.4%, but revenue per requisition only +0.1% (+2.4% organic), signaling pricing and mix pressure.
- Ongoing risks: PAMA Medicare cuts, health plan utilization management, OBBBA and ACA subsidy expiration (up to 50-60 bps revenue headwind by 2028), and execution risk on Project Nova (2031-2032 completion).
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, Quest Diagnostics Inc kept $0.09.
- Revenue$11.04B100.0%
- Cost of revenue−$7.37B66.8%
- Gross profit$3.67B33.2%
- Operating costs−$2.11B19.1%
- Operating income$1.56B14.1%
- Interest, other & tax−$564.0M5.1%
- Net income$992.0M9.0%
Where FY2025 revenue went
$11.04B- Cost of revenue: $7.37B, 67% of revenue
- SG&A: $1.97B, 18% of revenue
- Net income: $992.0M, 9.0% of revenue
- Other operating costs: $142.0M, 1.3% of revenue
- Interest, other & tax: $564.0M, 5.1% of revenue
Kept 9.0% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 26, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $11.04B$9.87B | +11.8% |
| Cost of Revenue | $7.37B$6.63B | +11.2% |
| Gross Profit | $3.67B$3.24B | +13.0% |
| SG&A Expenses | $1.97B$1.77B | +11.1% |
| Operating Expenses | $9.48B$8.53B | +11.2% |
| Operating Income | $1.56B$1.35B | +15.6% |
| Net Income | $992.00M$871.00M | +13.9% |
| EPS (Basic) | $8.87$7.78 | +14.0% |
| EPS (Diluted) | $8.75$7.69 | +13.8% |
| Shares Outstanding (Basic) | 111.00M111.00M | 0.0% |
| Shares Outstanding (Diluted) | 113.00M113.00M | 0.0% |
05—Questions
Frequently Asked Questions
How much of 2025 revenue growth was organic versus acquired?
Total net revenues grew 11.8%, but organic growth was 5.3%. Acquisitions contributed about 6.7 percentage points to DIS revenue, mainly LifeLabs (full-year effect) and the Spectra Laboratories assets. Organic DIS requisition volume grew 3.4%, while total requisition volume grew 12.3% including acquisitions.
Is Quest's pricing improving?
Only modestly. Revenue per requisition rose just 0.1% in 2025, or 2.4% on an organic basis. The gap reflects lower revenue per requisition at LifeLabs, which offset gains from more tests per requisition and favorable test mix.
What regulatory and reimbursement risks could affect future results?
The main risks are continued Medicare clinical lab fee schedule pressure under PAMA, which Congress has repeatedly delayed but not fixed; increased health plan prior authorization and utilization controls; and the OBBBA plus expiration of enhanced ACA premium tax credits, which management estimates could reduce consolidated revenue by up to 50-60 basis points by 2028. The FDA's LDT rule was vacated in 2025, but future legislation could still change the landscape.
How is Quest returning capital and managing its balance sheet?
Quest returned $452M through buybacks and $353M through dividends in 2025. The Board raised the quarterly dividend to $0.86 and added $1B to the buyback program, leaving $1.4B available. Total debt was about $5.7B at year-end 2025, the company retains about $1.3B of undrawn credit facility capacity, and it plans to repay $500M of notes due June 2026.
06—Continue