Quest Diagnostics (NYSE:DGX) executives highlighted what they described as strong execution in 2025 and outlined expectations for continued organic growth in 2026, while also discussing a one-year delay in PAMA rate cuts, the ramp of major partnerships, and ongoing investment in operational modernization.
Fourth-quarter results and full-year cash flow
Chief Financial Officer Sam Samad said fourth-quarter consolidated revenue was $2.81 billion, up 7.1% year over year, with 6.4% consolidated organic revenue growth. Revenue for Diagnostic Information Services increased 7.3%, which management attributed to organic growth in the physician, hospital, and consumer channels as well as contributions from recent acquisitions.
Reported operating income was $386 million, or 13.8% of revenue, unchanged as a percentage from the prior year. On an adjusted basis, operating income was $429 million, or 15.3% of revenue, compared with 15.6% a year earlier. Samad said adjusted operating income dollars increased on organic growth and recent acquisitions, partially offset by wage increases, while margins were pressured by startup expenses tied to Fresenius Medical Care and Corewell Health and by Project Nova expenses.
Quest reported fourth-quarter EPS of $2.18 and adjusted EPS of $2.42, compared with $1.95 and $2.23, respectively, in the prior-year quarter. For the full year, cash from operations was $1.89 billion, up from $1.33 billion, driven by higher operating income, working-capital timing, a cash tax benefit from recent tax legislation, and a one-time CARES Act tax credit.
2026 guidance and key assumptions
For 2026, management guided to revenue of $11.7 billion to $11.82 billion (growth of 6% to 7.1%). Reported EPS is expected to be $9.45 to $9.65, with adjusted EPS of $10.50 to $10.70. Cash from operations is expected to be approximately $1.75 billion, and capital expenditures are expected to be about $550 million. Samad said the company’s share count and interest expense are expected to be consistent with 2025.
Quest said its revenue outlook does not include any contribution from prospective M&A. The company also noted severe weather in January 2026 created a larger headwind than the same period a year earlier, and management said the impact to date was contemplated in full-year guidance. Leadership said seasonality should be broadly consistent with 2025 and with pre-COVID patterns.
Samad said operating margin is expected to expand in 2026 versus 2025, though the year will include several moving pieces. He highlighted that Project Nova, a multi-year order-to-cash modernization, is expected to be about $0.25 of EPS dilution in 2026 due to higher investment spend versus 2025. He also said the company expects its adjusted effective tax rate to increase by about 100 basis points year over year.
On quarterly cadence, Samad described a typical pattern in which the first quarter is usually the weakest, the second quarter is the strongest, and EPS steps down in the third and fourth quarters. He said Quest expects roughly just over 49% of EPS contribution in the first half and just over 50% in the second half.
Channel performance, partnerships, and competitive commentary
Chief Executive Officer Jim Davis said Quest is focused on serving core clinical customers (physicians and hospitals) while also pursuing higher-growth areas in consumer testing, life sciences, and data analytics.
In the physician channel, management reported high single-digit organic revenue growth in the fourth quarter, citing demand for clinical solutions and geographic expansion from increased health plan access. Davis said Quest scaled lab testing to serve more than 200,000 patients at Fresenius Medical Care dialysis centers and added water purity testing capabilities to support dialysis customers nationwide.
In the hospital channel, revenue grew low single digits, with growth driven by collaborative lab solutions. Davis said that at the start of 2026 Quest began scaling co-lab solutions across all 21 hospitals of Corewell Health, describing it as the company’s largest implementation to date. Quest expects co-lab solutions to generate approximately $1 billion in annual revenue in 2026. Davis also said Quest recently finalized a laboratory joint venture with Corewell Health and is jointly constructing a laboratory in Southeast Michigan to serve the state beginning in 2027.
Executives discussed market share dynamics, pointing to reinstatements in-network with Elevance in several states (Davis cited Nevada, Colorado, Georgia, and Virginia) and being back in network with Sentara as sources of share gains. Davis said the company expects a multi-year ramp to reach target share levels in those states.
Consumer growth and advanced diagnostics
Quest emphasized consumer-initiated testing and partnerships with wellness and wearables companies. Davis said QuestHealth.com expanded to more than 150 tests in the fourth quarter, including a new 85-biomarker Elite Health Profile. Management reiterated that consumer-initiated testing exceeded its expectation of more than 20% growth in 2025, and Davis said the consumer channel generated nearly $250 million of revenue for the full year. He also said QuestHealth.com is at a $100 million run-rate and is seeing growth across both wellness panels and episodic testing such as allergy, tick, A1C, and STD testing.
Samad added that the consumer business carries an attractive margin profile above the corporate average because it is cash-pay and avoids denials and patient concessions.
On advanced diagnostics, Davis said Quest is driving growth in five clinical areas: cardiometabolic and endocrine, autoimmune, brain health, oncology, and women’s and reproductive health. He highlighted:
- ANAlyzer, which he described as a solution intended to aid diagnosis of eight common autoimmune disorders and help primary care clinicians categorize likely disease and speed referrals.
- Quest AD-Detect blood tests for Alzheimer’s disease, which Davis said continued double-digit growth momentum as blood-based biomarkers gained adoption.
- Oncology MRD, including research presented at ASCO GI that Quest said supported the clinical value of Haystack MRD in colorectal cancer monitoring, and the recent launch of a Flow MRD blood test for myeloma that Davis said can deliver results in three days and may reduce reliance on bone marrow biopsies.
PAMA update and reimbursement discussions
Davis addressed PAMA, saying bipartisan legislation delayed implementation until the end of 2026 and updated the data collection period to the first half of 2025. While the company welcomed the delay as meaningful short-term relief, Davis said it does not resolve what he called structural flaws, citing low historical participation in CMS commercial payer data reporting. Davis said Quest continues to advocate for the Results Act, which he described as a proposal to use an independent third-party database rather than self-reporting by thousands of labs.
On oncology reimbursement, Davis said Quest continues to adjudicate Haystack MRD through Novitas and is awaiting a MolDX technical assessment to support Medicare Advantage coverage positioning. He also said the company is engaged with major commercial payers and continues to appeal denials with medical necessity support.
In addition, Quest discussed partnerships in multi-cancer early detection and screening logistics, including its relationship with GRAIL for blood draws and a partnership to provide draws for Guardant’s colon cancer blood screening test, which management said would begin later in the first quarter. Executives said those partnerships are reflected in 2026 guidance but represent a modest contribution.
About Quest Diagnostics (NYSE:DGX)
Quest Diagnostics (NYSE: DGX) is a leading provider of diagnostic information services that supports clinical decision-making for patients, physicians and healthcare organizations. The company operates a network of clinical laboratories and patient service centers that perform a broad range of laboratory tests and diagnostic assays used in routine care, disease diagnosis, monitoring and screening.
Its services span core clinical laboratory testing, anatomic pathology, molecular and genomic diagnostics, infectious disease testing and toxicology.
