10-QPeriod: Q1 FY2026

QUEST DIAGNOSTICS INC Quarterly Report for Q1 Ended Mar 31, 2026

Filed April 22, 2026For Securities:DGX

Summary

Quest Diagnostics Inc. reported a strong first quarter for 2026, with net revenues increasing by 9.2% to $2.9 billion, driven primarily by a robust 9.4% growth in its Diagnostic Information Services (DIS) segment. This growth was fueled by a significant 10.9% increase in requisition volume, bolstered by new relationships with Corewell Health and expanded services at Fresenius Medical Care facilities, although revenue per requisition saw a slight decrease due to the business mix of these new partnerships. Diluted earnings per share also saw a healthy rise to $2.24, up from $1.94 in the prior year period, reflecting improved operational performance and cost management. The company also demonstrated solid cash flow generation, with net cash provided by operating activities at $278 million. Financially, Quest Diagnostics maintained a solid position, with total assets growing to $16.7 billion and total stockholders' equity increasing to $7.7 billion. The company's Invigorate program continues to be a focus, aiming for annual cost savings and productivity improvements, which are helping to offset inflationary pressures. Despite some charges related to restructuring and fair value adjustments of contingent considerations, the overall financial health appears robust, supported by continued strategic investments and a substantial share repurchase authorization.

Financial Highlights

55 data points
Beta

Revenue

$2.90B

32.5% Gross Margin

Net Income

$252.00M

8.7% Net Margin

EPS (Diluted)

$2.24

Total Assets

$16.67B

Cash & Equivalents

$393.00M

Free Cash Flow

$164.00M

Financial Statements
Beta
Revenue$2.90B
Cost of Revenue$1.95B
Gross Profit$942.00M
SG&A Expenses$504.00M
Operating Expenses$2.50B
Operating Income$399.00M
Net Income$252.00M
EPS (Basic)$2.27
EPS (Diluted)$2.24
Shares Outstanding (Basic)110.00M
Shares Outstanding (Diluted)112.00M

Key Highlights

  • 1Net revenues increased by 9.2% to $2.9 billion in Q1 2026 compared to Q1 2025.
  • 2Diagnostic Information Services (DIS) revenue grew by 9.4%, driven by a 10.9% increase in requisition volume.
  • 3Diluted earnings per share (EPS) rose to $2.24 from $1.94 year-over-year.
  • 4Net cash provided by operating activities was $278 million, demonstrating strong operational cash flow generation.
  • 5The company completed a business acquisition with Corewell Health in January 2026, contributing to DIS revenue growth.
  • 6Quest Diagnostics continues to execute its Invigorate program aimed at driving cost savings and productivity improvements.
  • 7The company has a significant share repurchase authorization, with $1.4 billion remaining as of March 31, 2026.

Frequently Asked Questions

The increase in net revenues was primarily driven by the Diagnostic Information Services (DIS) segment, which saw a 9.4% rise. This growth was largely attributable to a 10.9% increase in requisition volume, influenced by new partnerships such as the one with Corewell Health and expanded services for Fresenius Medical Care. While revenue per requisition saw a slight decrease due to the mix of services with these new partners, overall volume growth compensated for this.

The transaction with Corewell Health, completed in January 2026, has been consolidated into Quest Diagnostics' financial statements and is included in the DIS segment. While the full impact will develop as the new laboratory facility becomes operational in 2027, the initial contribution from this business has helped drive the significant increase in requisition volume and overall DIS revenue for the first quarter of 2026.

The Invigorate Program is a multi-year initiative by Quest Diagnostics focused on driving cost savings and productivity improvements across various operational areas, including patient services, logistics, laboratory operations, and procurement. The program aims for 3% annual cost savings and utilizes automation and AI to enhance productivity and quality. These efforts are helping to mitigate rising costs, such as labor and benefits, and offset reimbursement pressures.

Quest Diagnostics has been actively returning capital to shareholders. In the first quarter of 2026, the Board declared a quarterly cash dividend of $0.86 per common share. Furthermore, in February 2026, the Board authorized an additional $1 billion for share repurchases, with $1.4 billion remaining available under this authorization as of March 31, 2026. The company repurchased no shares directly under this program during the first quarter of 2026 but did have employee transactions involving stock options and restricted stock units.