Labcorp (LH) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue grew 5.8% to $3.54B, with strong gains in both Diagnostics and Biopharma Laboratory Services, driven by organic growth, acquisitions, and favorable currency translation.

• Adjusted EPS rose 10.6% to $4.25, and adjusted net income reached $352.4M; diluted EPS increased 32.8% to $3.35.

• Margin expansion was achieved across both Diagnostics and Biopharma segments, with adjusted operating margin up to 14.4%.

• Strategic priorities advanced, including specialty testing, consumer health, AI-driven operational improvements, and key acquisitions and partnerships.

• Guidance for 2026 was raised, reflecting confidence in durable growth and margin expansion.

Financial highlights

• Enterprise revenue reached $3.54B, up 5.8% year-over-year; Diagnostics revenue grew 5.0% to $2.76B, Biopharma Laboratory Services up 8.2% to $781M.

• Adjusted operating income was $508M (14.4% margin), up from $469M (14%); operating income increased 16.8% to $380.8M.

• Adjusted EPS was $4.25, up from $3.84; net earnings attributable to shareholders rose to $277.8M.

• Free cash flow improved to $71M, reversing a $180M use of cash last year.

• Gross profit for Q1 2026 was $1.03B (non-GAAP), up from $973.7M in Q1 2025.

Outlook and guidance

• 2026 enterprise revenue expected to grow 5%-6.1%, with Diagnostics up 5.1%-5.9% and Biopharma Laboratory Services up 3.8%-5.4%.

• Adjusted EPS guidance raised to $17.70-$18.35, midpoint growth ~10%.

• Free cash flow guidance remains $1.24B-$1.36B, weighted to the second half.

• Margin expansion expected in both segments, with Biopharma Laboratory Services margin outpacing Diagnostics.

• Management expects to remain in compliance with all debt covenants and leverage ratios for the next 12 months.