Labcorp Raises 2026 Outlook as Q3 Revenue Grows 6.9%

Labcorp Holdings Inc. (NYSE: LH) raised its 2026 revenue and adjusted earnings guidance after third-quarter revenue increased 6.9%, supported by growth in both Diagnostics Laboratories and Biopharma Laboratory Services. The biopharma business recorded 8.5% revenue growth and a higher book-to-bill ratio, while diagnostics growth was driven primarily by testing volume.

Revenue for the three months ended September 30 rose to $3.81 billion from $3.56 billion a year earlier. On a constant-currency basis, revenue grew 7.0%, with foreign exchange reducing reported growth by 0.1 percentage point.

GAAP net earnings attributable to Labcorp were $262.8 million, compared with $261.1 million in the prior-year quarter. Diluted GAAP earnings per share increased to $3.22 from $3.12, helped in part by a decline in weighted-average diluted shares to 81.6 million from 83.7 million.

Adjusted net income rose to $390.3 million from $349.8 million, and adjusted EPS increased 14.4% to $4.78 from $4.18. Adjusted operating income advanced to $570.0 million from $513.3 million, lifting the adjusted operating margin to 15.0% from 14.4%. Adjusted EBITDA increased to $671.4 million from $610.3 million.

GAAP operating income was $402.1 million, versus $396.6 million a year earlier. The quarter included $78.7 million of amortization of intangible and other assets, $15.9 million of restructuring and other charges, $23.0 million of acquisition- and disposition-related costs, and $28.6 million of LaunchPad costs, among other adjustments.

Diagnostics growth led by volume

Diagnostics Laboratories generated third-quarter revenue of $2.95 billion, up 6.5% as reported and 6.6% in constant currency. Testing volume, measured in requisitions, increased 4.8%, while price and mix contributed 1.7 percentage points to revenue growth. The quarter had an additional 0.25 revenue day compared with the prior-year period.

Esoteric testing represented 41.9% of Diagnostics Laboratories revenue, up from 41.4% a year earlier, while routine testing accounted for 58.1%. Third-party payers remained the largest payer category at 46.9% of segment revenue.

Biopharma orders and backlog expand

Biopharma Laboratory Services revenue rose 8.5% to $866.7 million and increased 8.8% in constant currency. Central Laboratories revenue climbed to $645.9 million from $579.2 million, while Early Development Research Laboratories revenue was $220.8 million, compared with $219.9 million a year earlier.

Quarterly net orders increased to $981.1 million from $710.8 million, producing a book-to-bill ratio of 1.13, compared with 0.89 in the third quarter of 2025. For the trailing 12 months, net orders totaled $3.59 billion and the net book-to-bill ratio was 1.10.

Backlog reached $8.92 billion as of September 30, up from $8.58 billion a year earlier. Labcorp estimated that $2.82 billion of the backlog would convert to revenue over the following 12 months, compared with $2.66 billion at September 30, 2025. The company noted that backlog figures include the effects of cancellations and foreign-currency translation.

2026 guidance increased

Labcorp now expects 2026 enterprise revenue of $14.78 billion to $14.89 billion, representing growth of 5.9% to 6.7%. Its previous range was $14.71 billion to $14.83 billion, or growth of 5.4% to 6.3%. Updated enterprise guidance includes a 0.3% benefit from foreign-currency translation.

Diagnostics Laboratories revenue is projected at $11.48 billion to $11.55 billion, equal to growth of 5.5% to 6.2%. Biopharma Laboratory Services revenue is expected to reach $3.33 billion to $3.36 billion, representing growth of 7.4% to 8.4% and including a 1.3% foreign-exchange benefit.

The company raised its adjusted EPS forecast to $18.30 to $18.70 from $18.10 to $18.55. Its free-cash-flow outlook was unchanged at $1.24 billion to $1.36 billion.

For the first nine months of 2026, revenue rose 6.2% to $11.08 billion. GAAP diluted EPS increased to $10.22 from $8.48, while adjusted EPS rose to $14.02 from $12.37. At the end of the third quarter, total debt to trailing-12-month adjusted EBITDA was 2.3 times, and net debt to adjusted EBITDA was 2.2 times.

Labcorp cautioned that its outlook remains subject to factors including changes in healthcare and payer regulations, customer purchasing decisions, testing guidelines, inflation, competition, geopolitical events, employee retention, technology and data-security failures, acquisition execution, foreign-exchange movements and the possibility that expected benefits from investments and business initiatives may not be realized.