Quest Diagnostics (DGX) investor relations material

Performance and growth trends

• Revenue growth exceeded long-range plans, with 2025 at 12% and 2026 guidance near 8%; earnings growth guided at 13-14% for 2026, mostly from organic sources.

• $2.8 billion deployed in M&A since 2024, with 2024 being a heavy acquisition year; recent years focused on integrating large deals and partnerships.

• Major partnerships, such as Corewell Health and Fresenius, contributed significant new business and required substantial integration efforts.

• Structural drivers include chronic disease prevalence, aging population, and new test adoption, supporting stable and growing core physician business.

• Consumer health segment is growing rapidly, with direct-to-consumer and partnership channels expanding test volumes and margins.

Strategic shifts and market approach

• Shift from M&A-driven growth to more organic and partnership-based expansion due to limited attractive acquisition targets.

• Selective approach to M&A, focusing on deals that meet a 10% ROIC target after three years.

• Expansion into underpenetrated MSAs achieved through health system partnerships and acquisitions, leading to increased market share and growth.

• New executive hires bring expertise in strategy, M&A, and healthcare integration, supporting ongoing strategic evolution.

• Board additions provide retail, payer, and HR experience, enhancing governance and strategic insight.

Consumer health and wellness trends

• Direct-to-consumer business reached $250 million at end of 2025, growing at least 30% in 2026, with margins above company average.

• Partnerships with brands like Function Health, Hims & Hers, WHOOP, Oura, and Apple Health are driving volume and mix improvements.

• Pricing in consumer health remains stable, with wholesale prices steady and cash-pay model eliminating denials and concessions.

• Average consumer requisition includes 10-12 tests, significantly higher than physician office averages.

• Fixed cost leverage and direct model contribute to accretive margins in consumer health.