The laboratory services company updates full-year guidance following continued momentum in diagnostics and central laboratory businesses.
Labcorp reported third-quarter revenue of $3.56 billion, representing 8.6% growth compared to the same period in 2024, driven by strong performance across its diagnostics and biopharma laboratory services segments.
The Burlington, North Carolina-based company’s organic revenue growth reached 6.2% for the quarter, with acquisitions contributing an additional 1.7% and foreign exchange adding 0.7%. Adjusted earnings per share increased 19.4% to $4.18, compared to $3.50 in the third quarter of 2024.
“Labcorp’s third-quarter performance reflects continued momentum in our diagnostics and central laboratory businesses, resulting in strong revenue growth and margin improvement,” says Adam Schechter, chairman and CEO of Labcorp, in a release. “We advanced our strategy by forming new partnerships with health systems and regional laboratories, introducing innovative tests in key specialty areas, and leveraging science and technology to improve customer experience and operational efficiency.”
Diagnostics Segment Shows Strong Growth
The company’s diagnostics laboratories segment generated $2.77 billion in revenue, an 8.5% increase from the prior year period. Organic growth reached 6.3%, while acquisitions contributed 2.2% to the segment’s performance. Adjusted operating income for the segment increased to $450.4 million, with margins improving 110 basis points to 16.3%.
Volume metrics showed total requisition growth of 4.7%, with organic requisitions increasing 3.5%. Price and mix improvements contributed 3.7% overall, with organic price and mix adding 2.8%.
The diagnostics business benefited from strong performance at Invitae, the genetic testing company Labcorp acquired, along with favorable weather conditions compared to the prior year.
Biopharma Services Maintains Momentum
Labcorp’s biopharma laboratory services segment reported revenue of $799.1 million, up 8.3% year-over-year. Central laboratory services drove much of the growth with a 10.3% increase, while early development services grew 3.3%.
The segment’s adjusted operating income reached $132.2 million, representing 9% growth driven by organic demand. Operating margins remained stable at 16.5%.
The company’s trailing twelve-month net orders totaled $3.34 billion, with a book-to-bill ratio of 1.09. Backlog increased 5.4% compared to the prior year to $8.58 billion.
Updated Full-Year Guidance
Based on third-quarter performance, Labcorp updated its 2025 full-year guidance. The company now expects enterprise revenue growth of 7.4% to 8.0%, narrowed from the previous range of 7.5% to 8.6%.
Adjusted earnings per share guidance was raised to a range of $16.15 to $16.50, compared to the previous range of $16.05 to $16.50. Free cash flow expectations were increased to $1.17 billion to $1.29 billion.
For the Diagnostics Laboratories segment, Labcorp expects revenue growth of 7.2% to 7.8%. The Biopharma Laboratory Services segment is projected to grow 5.7% to 7.1%.
Strong Cash Generation
Operating cash flow for the quarter reached $387.2 million, compared to $277.3 million in the prior year period. Free cash flow increased to $280.5 million from $161.5 million, primarily driven by higher cash earnings.
The company declared a quarterly dividend of $0.72 per share and repurchased $25 million of common stock during the quarter.
Nine-month results showed total revenue of $10.44 billion, up 7.8% from 2024, with adjusted earnings per share of $12.37 compared to $11.12 in the prior year period.
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