01—Abstract
Summary
Summary of the 10-K filed February 25, 2025. Cited figures are marked; the original filing is the authoritative source.
Labcorp Holdings Inc. (LH) reported 2024 revenues of $13,008.9 milliona, up 7.0% from $12,161.6 million in 2023.
Organic revenue grew 3.9% (Base Business up 4.9%, partly offset by a 1.0% decrease in COVID-19 Testing), acquisitions net of divestitures contributed 2.8%, and favorable foreign currency translation added 0.2%. Operating income rose to $1,086.7 millionb from $725.6 million, aided by the absence of the prior year's $349.0 million goodwill and asset impairment charge. Diluted EPS from continuing operations was $8.84, versus $4.33 in 2023.
Net earnings attributable to Labcorp Holdings were $746.0 millionc, compared with $418.0 million in 2023. Operating cash flow from continuing operations was $1,585.8 million. Diagnostics Laboratories (Dx) generated $10,144.3 million of revenue and $1,606.3 million of segment operating income, a 15.8% operating margin.
Biopharma Laboratory Services (BLS) generated $2,922.6 milliond of revenue and $458.9 million of segment operating income, a 15.7% operating margin. The company invested $839.0 million in acquisitions during 2024, including Invitae and BioReference Health, and repurchased $250.1 million of stock. It paid $243.1 million in dividends and ended the year with $1,518.7 million in cash.
Total senior notes principal was about $6.2 billion, and the company issued $2.0 billion of new senior notes in September 2024. The filing highlights regulatory and reimbursement risk. The 2026 PAMA reduction of $100.0 million in Medicare reimbursement is expected, unless implementation is further delayed or changed.
FDA's final rule on laboratory-developed tests (LDTs), with first compliance obligations starting May 6, 2025, is under legal challenge. The company also disclosed ongoing litigation, including the Ravgen patent verdict, in which the court awarded damages and ongoing royalties, and the AMCA data incident litigation.
02—Key points
Key Highlights
- Revenue of $13,008.9 million rose 7.0% year over year, with organic revenue up 3.9% and acquisitions, net of divestitures, contributing 2.8%.
- Diluted EPS from continuing operations was $8.84, compared with $4.33 in 2023; operating income was $1,086.7 million versus $725.6 million.
- Dx segment revenue was $10,144.3 million (78% of total) at a 15.8% segment operating margin; BLS revenue was $2,922.6 million (22% of total) at a 15.7% margin.
- Operating cash flow from continuing operations was $1,585.8 million, and year-end cash and cash equivalents were $1,518.7 million.
- Acquisitions totaled $839.0 million in 2024, and the company repurchased $250.1 million of common stock and paid $243.1 million in dividends.
- The company issued $2.0 billion of senior notes in September 2024 and repaid $1.0 billion of senior notes, while obtaining a $300.0 million accounts receivable facility (increased to $700.0 million in January 2025).
- Key risks include expected PAMA-related Medicare reimbursement reductions of $100.0 million in 2026, FDA's LDT final rule with a first phase of compliance beginning May 6, 2025, and the Ravgen patent litigation.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Labcorp Holdings kept $0.06.
- Revenue$13.01B100.0%
- Cost of revenue−$9.38B72.1%
- Gross profit$3.62B27.9%
- Operating costs−$2.54B19.5%
- Operating income$1.09B8.4%
- Interest, other & tax−$340.7M2.6%
- Net income$746.0M5.7%
Where FY2024 revenue went
$13.01B- Cost of revenue: $9.38B, 72% of revenue
- SG&A: $2.23B, 17% of revenue
- Net income: $746.0M, 5.7% of revenue
- Other operating costs: $307.7M, 2.4% of revenue
- Interest, other & tax: $340.7M, 2.6% of revenue
Kept 5.7% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 25, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $13.01B$12.16B | +7.0% |
| Cost of Revenue | $9.38B$8.80B | +6.7% |
| Gross Profit | $3.62B$3.36B | +7.7% |
| SG&A Expenses | $2.23B$2.02B | +10.3% |
| Operating Income | $1.09B$725.60M | +49.8% |
| Interest Expense | $208.30M$199.60M | +4.4% |
| Net Income | $746.00M$418.00M | +78.5% |
| EPS (Basic) | $8.89$4.80 | +85.2% |
| EPS (Diluted) | $8.84$4.77 | +85.3% |
| Shares Outstanding (Basic) | 83.90M87.10M | −3.7% |
| Shares Outstanding (Diluted) | 84.40M87.60M | −3.7% |
05—Questions
Frequently Asked Questions
How did Labcorp's revenue and profitability change in 2024?
Revenues rose 7.0% to $13,008.9 million from $12,161.6 million. Operating income increased to $1,086.7 million from $725.6 million, and diluted EPS from continuing operations was $8.84 versus $4.33. The 2023 period included a $349.0 million goodwill and other asset impairment charge, while 2024 included $5.3 million of such charges.
What drove revenue growth in 2024?
Organic revenue increased 3.9%, driven by a 4.9% increase in the Base Business, partly offset by a 1.0% decrease in COVID-19 Testing. Acquisitions, net of divestitures, added 2.8%, and favorable foreign currency translation added 0.2%.
What are the main regulatory and reimbursement risks?
The filing cites PAMA, under which additional Clinical Laboratory Fee Schedule reductions of $100.0 million are expected for 2026 unless implementation is further delayed or changed. It also cites the FDA's final rule regulating laboratory-developed tests as medical devices, with the first compliance phase beginning May 6, 2025 absent a successful legal challenge, and ACLA's lawsuit challenging the rule.
How is the company deploying capital?
In 2024 the company spent $839.0 million on acquisitions, $489.9 million on capital expenditures, $250.1 million on share repurchases, and $243.1 million on dividends. Authorization of $1,280.4 million remained under the share repurchase program at year-end, and the company declared a $0.72 quarterly dividend for the first quarter of 2025.
What litigation could materially affect Labcorp?
The Ravgen patent case produced a jury verdict of $272.0 million, enhanced damages of $100.0 million, and post-verdict supplemental damages of $2.6 million plus an ongoing royalty of $100 per test. The company strongly disagrees and will appeal. The filing also describes AMCA Incident class actions and government inquiries, and a Texas Medicaid qui tam case in which the Texas Court of Appeals reversed a partial summary judgment in the company's favor.
06—Continue