Labcorp (NYSE:LH) executives said the company delivered what CEO Adam Schechter called a “very strong year” in 2025, citing more than 7% revenue growth, 13% adjusted EPS growth, and margin expansion of more than 50 basis points. On the company’s fourth-quarter earnings call, management also introduced 2026 guidance that calls for continued growth and further margin improvement across both the Diagnostics and Biopharma Laboratory Services (BLS) segments.
2025 performance and strategic execution
Schechter said Labcorp advanced several strategic priorities in 2025, including expansion of partnerships with health systems and regional laboratories. The company signed or closed 13 deals, and management said transactions completed over the past three years have contributed more than $1 billion in revenue growth while expanding access to routine and specialty testing.
Management also highlighted continued strength in specialty and esoteric testing. Schechter said esoteric testing grew double digits in 2025 and remains a key growth engine, including in the company’s central laboratory business serving clinical trials. CFO Julia Wang added that esoteric testing as a share of total testing revenue increased over time, from 37.5% in the first quarter of 2023 to 41.5% in the fourth quarter of 2025.
Test menu expansion, consumer health, and technology initiatives
Labcorp said it launched more than 130 new tests in 2025, with most in oncology, women’s health, neurology, and autoimmune disease. Schechter also pointed to new specialty test additions in early 2026, including expanded minimal residual disease (MRD) testing access for stage I-III breast cancer, stage I-IIIA non-small cell lung cancer, and stage III colon cancer. In neurology, he said Labcorp launched the first FDA-cleared blood test for Alzheimer’s disease assessment in the primary care setting.
On the consumer side, Schechter said Labcorp OnDemand expanded and now offers tests spanning more than 200 biomarkers across categories including men’s and women’s health, cancer screenings, sexual health, and longevity. He said OnDemand launched tests for food allergies, micronutrients, and thyroid health during the quarter.
Management also emphasized technology and AI-driven efforts aimed at innovation, quality, customer experience, and efficiency. Schechter cited AI and automation in pathology, “psychology,” and microbiology, and said Labcorp became the first U.S. commercial laboratory to enter an agreement to implement Roche’s fully automated mass spectrometry solution. He also pointed to AI-enabled tools such as appointment scheduling and results reporting for consumers, an “AI Test Finder” for physicians, and the company’s Global Trial Connect platform for clinical trial workflows.
Fourth-quarter results: revenue growth and margin expansion
Wang said fourth-quarter revenue was $3.5 billion, up 5.6% year over year, driven by organic growth of 3.8%, acquisitions of 1.2%, and foreign currency translation of 0.6%. Adjusted operating income rose to $488 million (13.9% of revenue) from $423 million (12.7%) a year earlier, with management attributing the improvement primarily to organic growth in Diagnostics and Central Labs.
Adjusted EPS was $4.07, up 18% year over year. Free cash flow was $490 million, down from $665 million, which Wang attributed primarily to working capital timing. During the quarter, the company invested $258 million in acquisitions, paid $59 million in dividends, and repurchased $225 million of stock.
In Diagnostics, revenue was $2.7 billion, up 5.5%, with organic growth of 4.1% and acquisitions contributing 1.5%. Total volume grew 2.2%, split evenly between organic growth and acquisitions, while price/mix increased 3.3% (3.0% organic), driven primarily by an increase in tests per accession. Diagnostics adjusted operating income was $419 million (15.4% margin), up from $316 million (13.9%), reflecting 160 basis points of margin expansion.
In BLS, revenue was $793 million, up 3.4%, including 0.6% organic growth and a 2.8% benefit from foreign currency translation. Central Labs revenue grew 11.1% (7.7% constant currency), while Early Development revenue declined 13.5% (15.1% constant currency). BLS adjusted operating income was $136 million (17.2% margin), slightly higher than $131 million (17.0%) in the prior-year quarter. The segment ended the quarter with $8.7 billion of backlog, with management expecting approximately $2.7 billion to convert into revenue over the next 12 months.
Management highlighted BLS book-to-bill of 1.16 for the quarter and 1.09 on a trailing 12-month basis, which Schechter said underscored strong demand in Central Labs, including wins in oncology, neurology, and cardiometabolic studies.
2026 guidance and key assumptions
For 2026, Labcorp guided to enterprise revenue growth of 4.7% to 6%, including an estimated foreign exchange tailwind of about 40 basis points. The company expects Diagnostics revenue to rise 5% to 6%, with “the majority” of growth from organic performance. On the call, management said it assumes roughly half of Diagnostics organic growth will come from volume and half from price/mix, similar to 2025.
BLS revenue is expected to grow 3% to 5%, including a foreign exchange tailwind of 170 basis points and reflecting actions in Early Development. Management said it expects Central Labs to grow mid-single digits organically on a constant-currency basis, with Early Development “relatively flat,” improving throughout the year.
Labcorp guided adjusted EPS of $17.65 to $18.25, which Wang said implies about 9% growth at the midpoint and includes the impact of adverse weather year-to-date. Free cash flow is expected to be $1.24 billion to $1.36 billion, weighted toward the second half due to seasonality. The company expects a 2026 adjusted tax rate of about 23% and net interest expense of about $230 million.
On capital spending, Wang said 2026 capex is expected to be about 4% of revenue, higher than prior years, as the company begins investing in a new strategic site to support long-term Central Labs growth. Schechter added that Central Labs serves a global footprint—supporting sample collection from more than 100 countries—and said ongoing investments will include the new kit production and laboratory facility as well as customer-facing digital tools like Global Trial Connect. The company previously announced construction of a 500,000+ square foot central laboratory and kit production facility expected to begin later in 2026.
Additional call highlights: PAMA, Early Development streamlining, and leadership changes
Management said its 2026 outlook reflects a delay of PAMA-related cuts through Dec. 31, 2026, while emphasizing that permanent reform is still needed. Schechter said Labcorp will continue to advocate for the RESULTS Act. He added that if data submission is required under PAMA, the company will be prepared to submit.
Wang also addressed other guidance factors raised during Q&A, including an estimated 30 basis point reduction to Diagnostics volume in 2026 related to the expiration of the ACA tax credit, which she said is incorporated into guidance. She noted January weather was worse than the prior year and said the year-to-date impact is reflected in the company’s guidance. On earnings cadence, Wang said 2025—roughly half of earnings in the first half and half in the second—could serve as a reasonable directional proxy for 2026.
In Early Development, management reiterated plans to streamline the business, actions expected to reduce annual revenue by $50 million while increasing operating income. Wang said those actions began in the fourth quarter of 2025 and are expected to be largely completed by the end of the second quarter of 2026. Schechter characterized Early Development as less than 6% of company revenue and said the goal is to improve utilization and profitability after a prolonged period in which expected market growth did not return to prior levels.
Finally, Schechter said Mark Schroeder, executive vice president and president of Diagnostics and chief operating officer, and Sandy van der Vaart, executive vice president and chief legal officer and corporate secretary, will retire on April 1. He said successors have been appointed under a succession plan and that the company expects to introduce them in coming months, as well as provide updates around an Investor Day planned later in 2026.
About Labcorp (NYSE:LH)
Laboratory Corporation of America Holdings, commonly known as Labcorp (NYSE: LH), is a global life sciences company that provides comprehensive clinical laboratory and drug development services. The company operates a broad network of laboratories, patient service centers and specialty testing sites to deliver diagnostic information and testing solutions that support patient care, clinical decision-making and population health initiatives.
Labcorp’s core businesses encompass clinical laboratory testing and pharmaceutical development services.
