Labcorp (LH) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue grew 9.5% year-over-year to $3.53 billion, with double-digit topline growth and margin expansion across both Diagnostics and Biopharma segments, driven by organic growth, acquisitions, and favorable FX.

• Adjusted EPS increased 10% to $4.35, and net earnings attributable to shareholders rose to $237.9 million, with diluted EPS at $2.84.

• Strategic acquisitions and partnerships, including deals with Insight Diagnostics, UHealth, BioReference Health, Community Health Systems, and SYNLAB, expanded reach and capabilities.

• Continued innovation in specialty testing (oncology, neurology, women's health, autoimmune), digital/AI-driven efficiencies, and new consumer offerings.

• Broadened partnerships with hospitals, health systems, and regional labs, and completed transition services related to the Fortrea spin-off.

Financial highlights

• Q2 2025 revenue: $3.53 billion, up 9.5% year-over-year (organic growth 5.4%-9.5%, acquisitions 3.5%, FX 0.6%).

• Adjusted operating income: $532 million (15.1% margin), up from $480 million (14.9%) last year; operating income: $394.5 million (11.2% margin).

• Net earnings: $237.9 million ($2.84 per diluted share); adjusted EPS: $4.35, up 10.4% year-over-year.

• Operating cash flow: $621 million; free cash flow: $543 million, up $110 million year-over-year.

• Debt leverage at 2.5x gross debt to trailing 12-month adjusted EBITDA; net debt to adjusted EBITDA at 2.2x.

Outlook and guidance

• 2025 revenue guidance raised to $13.98–$14.13 billion (7.5%-8.6% growth); Diagnostics revenue guidance $10.85–$10.96 billion (7.0%-8.0% growth); Biopharma revenue $3.10–$3.14 billion (6.1%-7.5% growth).

• Adjusted EPS guidance: $16.05–$16.50 (midpoint up $0.23, 12% growth); free cash flow guidance: $1.13B–$1.28B (midpoint up $25M).

• Expect majority of free cash flow in second half of year due to seasonality.

• Margin expansion expected in both Diagnostics and Biopharma segments for full year.

• Management expects to remain in compliance with all debt covenants and maintain sufficient liquidity.