การประชุมแถลงผลประกอบการไตรมาส 3 ปี 2026 ของ Labcorp (LH): ปรับเพิ่มคาดการณ์ผลประกอบการขณะที่อัตรากำไรขยายตัว

ประเด็นสำคัญ

• Labcorp Holdings (NYSE: LH) รายงานรายได้ประจำไตรมาส 3 ปี 2026 ที่ 3.8 พันล้านดอลลาร์ เพิ่มขึ้น 6.9% เมื่อเทียบรายปี ซึ่งรวมถึงการเติบโตจากภายใน (organic growth) 5.5%
• อัตรากำไรจากการดำเนินงานปรับปรุงแล้วขยายตัว 60 basis points สู่ระดับ 15.0% ซึ่งนับเป็นไตรมาสที่ 6 ติดต่อกันที่มีการพัฒนาของอัตรากำไรในระดับองค์กร ขณะที่กำไรต่อหุ้น (EPS) ปรับปรุงแล้วเพิ่มขึ้น 14.5% สู่ระดับ 4.78 ดอลลาร์
• รายได้จากธุรกิจวินิจฉัยโรค (Diagnostics) เพิ่มขึ้น 6.5% สู่ระดับ 2.9 พันล้านดอลลาร์ โดยได้รับแรงหนุนจากการเติบโตของปริมาณการให้บริการจากภายใน 3.1% และปัจจัยบวกจากราคาและส่วนผสมผลิตภัณฑ์ 1.3%
• รายได้จากธุรกิจบริการห้องปฏิบัติการชีวเภสัชภัณฑ์ (Biopharma Laboratory Services) เติบโต 8.5% สู่ระดับ 867 ล้านดอลลาร์ ขณะที่การเติบโตจากภายในตามอัตราแลกเปลี่ยนคงที่แตะระดับ 9.6% นำโดยการเติบโต 11.3% ในธุรกิจบริการห้องปฏิบัติการส่วนกลาง (Central Laboratory Services)
• ผู้บริหารปรับเพิ่มค่ากลางของคาดการณ์รายได้ระดับองค์กรและกำไรต่อหุ้น (EPS) ปรับปรุงแล้วสำหรับปี 2026 ทั้งปีขึ้นอีก 65 ล้านดอลลาร์ และ 0.18 ดอลลาร์ ตามลำดับ
• Labcorp ประเมินว่าตารางอัตราค่าธรรมเนียมเบื้องต้นตามกฎหมาย PAMA อาจส่งผลกระทบประมาณ 125 ล้านดอลลาร์ในปี 2027 โดยส่งผลกระทบหลักต่อการเบิกจ่ายชดเชยของ Medicare และ Medicaid รูปแบบดั้งเดิม

ข้อมูลทางการเงินที่สำคัญ

Labcorp ได้ใช้เงิน 256 ล้านดอลลาร์ไปกับการควบรวมกิจการ และจ่ายเงินปันผล 58 ล้านดอลลาร์ในระหว่างไตรมาส โดยปิดสิ้นไตรมาส 3 ด้วยเงินสด 262 ล้านดอลลาร์ และหนี้สินรวม 5.9 พันล้านดอลลาร์ ขณะที่เหลือวงเงินประมาณ 1.4 พันล้านดอลลาร์ตามโครงการซื้อหุ้นคืนที่ได้รับอนุมัติ

ผลการดำเนินงานทางธุรกิจและการปฏิบัติการ

ธุรกิจวินิจฉัยโรค

ธุรกิจวินิจฉัยโรคสร้างการเติบโตของรายได้จากภายใน 4.4% ซึ่งประกอบด้วยการเติบโตของปริมาณการให้บริการ 3.1% และปัจจัยบวกด้านราคาและส่วนผสมผลิตภัณฑ์ 1.3% ทั้งนี้ การควบรวมกิจการช่วยเพิ่มการเติบโตให้แก่กลุ่มธุรกิจอีก 2.2 percentage point โดยผู้บริหารระบุว่าปัจจัยบวกจากราคาและส่วนผสมผลิตภัณฑ์ส่วนใหญ่เป็นผลมาจากจำนวนการทดสอบที่เพิ่มขึ้นต่อคำสั่งตรวจ

จากข้อมูลของผู้บริหาร การตรวจวิเคราะห์เฉพาะทางยังคงเติบโตในอัตราประมาณสามเท่าของตลาดการวินิจฉัยโรคโดยรวม การตรวจวิเคราะห์ขั้นสูงเพิ่มขึ้นจาก 38% ของรายได้ธุรกิจวินิจฉัยโรคในไตรมาส 1 ปี 2024 เป็น 42% ในไตรมาส 3 ปี 2026

Labcorp ได้ขยายพอร์ตโฟลิโอการตรวจวิเคราะห์เฉพาะทางผ่านการวินิจฉัยร่วมเพื่อการรักษาที่ได้รับการอนุมัติจาก FDA สำหรับมะเร็งผิวหนังชนิดเมลาโนมาระยะลุกลาม และการตรวจเลือด pTau217 ที่ผ่านการรับรองจาก FDA สำหรับโรคอัลไซเมอร์ นอกจากนี้ ยังได้ประกาศการศึกษาวิจัยทางคลินิกร่วมกับสถาบันมะเร็ง Knight เพื่อประเมินการตรวจ Plasma Detect Genome MRD สำหรับตรวจหาการกลับมาเป็นซ้ำของมะเร็งกระเพาะปัสสาวะชนิดรุกรานชั้นกล้ามเนื้อ

ธุรกิจบริการห้องปฏิบัติการชีวเภสัชภัณฑ์

รายได้จากภายในตามอัตราแลกเปลี่ยนคงที่ของ BLS เพิ่มขึ้น 9.6% โดยธุรกิจบริการห้องปฏิบัติการส่วนกลางเติบโต 11.3% ซึ่งได้รับแรงหนุนหลักจากอุปสงค์พื้นฐาน ร่วมกับจังหวะเวลาการเริ่มต้นศึกษาวิจัยที่เป็นใจ ขณะที่การวิจัยและพัฒนาระยะเริ่มต้นเติบโต 5%

ผู้บริหารเปิดเผยว่าอุปสงค์ของห้องปฏิบัติการส่วนกลางยังคงแข็งแกร่งในกลุ่มบริษัทยาขนาดใหญ่ โดยโรคมะเร็งยังคงสร้างรายได้ต่อเนื่อง ขณะที่การทดลองทางคลินิกด้านโรคหัวใจและเมแทบอลิซึม ซึ่งรวมถึงกิจกรรมที่เกี่ยวข้องกับ GLP-1 ช่วยสร้างโอกาสเพิ่มเติม นอกจากนี้ Labcorp ยังระบุว่าบริษัทมีกำลังการรองรับเพียงพอที่จะสนับสนุนการเติบโตเพิ่มเติม และกำลังก่อสร้างศูนย์ห้องปฏิบัติการแห่งใหม่ในอินเดียแนโพลิส

การควบรวมกิจการและพันธมิตร

Labcorp ได้เข้าซื้อกิจการ MLM Medical Labs ทำให้ธุรกิจห้องปฏิบัติการส่วนกลางของบริษัทมีเครือข่ายที่ถือหุ้นทั้งหมดครอบคลุมอเมริกาเหนือ ยุโรป เอเชีย และแอฟริกา

หลังจากสิ้นสุดไตรมาส บริษัทได้ลงนามในข้อตกลงเพื่อเข้าซื้อสินทรัพย์ห้องปฏิบัติการบางส่วนของ BioReference Health, ธุรกิจตรวจสุขภาพก่อนคลอดของ Myriad Genetics และ Millennium Health โดยผู้บริหารคาดว่าแต่ละรายการจะช่วยเพิ่มกำไรต่อหุ้น (EPS) ปรับปรุงแล้วในปีแรก และคืนทุนเท่ากับต้นทุนเงินทุนภายในปีที่สาม

สำหรับ BioReference นั้น Labcorp คาดว่าจะสร้างรายได้ประมาณ 250 ล้านดอลลาร์ในระยะเวลา 12 เดือนแรก โดยมีอัตรากำไรจากการดำเนินงานปรับปรุงแล้วสูงกว่าค่าเฉลี่ยของกลุ่มธุรกิจวินิจฉัยโรคเล็กน้อย และมีส่วนช่วยเพิ่มกำไรต่อหุ้น (EPS) ปรับปรุงแล้วประมาณ 0.15 ดอลลาร์ รวมต้นทุนทางการเงิน ทั้งนี้ คาดว่าจะดำเนินการแล้วเสร็จในช่วงกลางปี 2027 ขึ้นอยู่กับการอนุมัติและเงื่อนไขตามปกติ

สินทรัพย์ของ Myriad Genetics คาดว่าจะช่วยเพิ่มรายได้ประมาณ 160 ล้านดอลลาร์ โดยผู้บริหารคาดว่ากำไรต่อหุ้น (EPS) ปรับปรุงแล้วจะเพิ่มขึ้นเล็กน้อยในปีแรก และอัตรากำไรจะสอดคล้องกับค่าเฉลี่ยของกลุ่มธุรกิจวินิจฉัยโรคภายในสิ้นปีที่สอง ทั้งนี้ คาดว่าจะแล้วเสร็จในช่วงต้นปี 2027 ขึ้นอยู่กับการอนุมัติและเงื่อนไขตามปกติ

คาดการณ์แนวโน้มโดยผู้บริหาร

ค่ากลางของคาดการณ์รายได้ระดับองค์กรเพิ่มขึ้น 50 basis points หรือ 65 ล้านดอลลาร์ โดยแนวโน้มที่ปรับปรุงใหม่นี้รวมถึงผลประโยชน์จากอัตราแลกเปลี่ยน 30 basis points ลดลงจาก 40 basis points ก่อนหน้านี้

ผู้บริหารปรับเพิ่มค่ากลางของคาดการณ์รายได้ BLS ขึ้น 190 basis points โดยมีสาเหตุหลักมาจากความแข็งแกร่งอย่างต่อเนื่องของห้องปฏิบัติการส่วนกลาง ทั้งนี้ ในเกณฑ์จากภายในตามอัตราแลกเปลี่ยนคงที่ ปัจจุบัน Labcorp คาดว่าห้องปฏิบัติการส่วนกลางจะเติบโตในระดับหลักเดียวช่วงสูง (high-single-digit) และยังคงคาดว่าการวิจัยและพัฒนาระยะเริ่มต้นจะเติบโตในระดับหลักเดียวช่วงต่ำ (low-single-digit)

บริษัทยังคงคาดการณ์ว่าอัตรากำไรเต็มปีจะขยายตัวทั้งในธุรกิจวินิจฉัยโรคและ BLS โดยช่วงกำไรต่อหุ้น (EPS) ปรับปรุงแล้วบ่งชี้ถึงการเติบโต 12.5% ที่ค่ากลาง นอกจากนี้ Labcorp ยังยืนยันแนวโน้มระยะยาวปี 2026–2029 อีกด้วย

ความเสี่ยงและประเด็นที่ต้องติดตาม

ตารางอัตราค่าธรรมเนียมเบื้องต้นของ CMS ภายใต้ PAMA คาดว่าจะลดการเบิกจ่ายชดเชยของ Medicare สำหรับรายการตรวจทางห้องปฏิบัติการหลายร้อยรายการโดยเริ่มในปี 2027 ทั้งนี้ Labcorp ประเมินผลกระทบประมาณ 125 ล้านดอลลาร์ในปี 2027 จาก Medicare และ Medicaid รูปแบบดั้งเดิม โดยมีผลกระทบลุกลามบางส่วนไปยังสัญญาผู้ชำระเงินรายอื่น

ผู้บริหารกำลังใช้การบังคับใช้ PAMA เป็นสมมติฐานกรณีฐาน ในขณะที่ยังคงสนับสนุนพระราชบัญญัติ Results Act หรือการเลื่อนเวลาที่อาจเกิดขึ้นได้ โดยคาดว่าผลกระทบใหญ่ที่สุดจะเกิดขึ้นในปี 2027 ตามด้วยผลกระทบที่ลดลงอย่างมีนัยสำคัญในปี 2028 และ 2029

กรอบเวลาและผลประโยชน์ทางเศรษฐกิจของการเข้าซื้อกิจการที่อยู่ระหว่างดำเนินการยังคงขึ้นอยู่กับการอนุมัติของหน่วยงานกำกับดูแล เงื่อนไขการปิดการขายตามปกติ และความคืบหน้าในการรวมกิจการ นอกจากนี้ ธุรกิจที่เพิ่งเข้าซื้อใหม่อาจต้องใช้เวลาเพื่อบรรลุอัตรากำไรเฉลี่ยตามกลุ่มธุรกิจของ Labcorp

ผลกระทบที่เกี่ยวข้องกับกฎหมาย Affordable Care Act ทำให้ปริมาณการให้บริการวินิจฉัยโรคลดลงประมาณ 30 basis points ในไตรมาส 3 ทั้งนี้ ผู้บริหารคาดว่าจะส่งผลกระทบใกล้เคียงกันในไตรมาส 4 และกล่าวว่าประเด็นนี้ถูกรวมอยู่ในคาดการณ์แนวโน้มที่ปรับปรุงใหม่แล้ว

ไฮไลต์คำถาม-ตอบกับนักวิเคราะห์

• อัตรากำไรปี 2027 และ PAMA: ผู้บริหารระบุถึงปัจจัยชดเชยหลัก 4 ประการ ได้แก่ การเติบโตพื้นฐานของธุรกิจวินิจฉัยโรค แรงส่งอย่างต่อเนื่องของ BLS มาตรการเพิ่มผลิตภาพของ LaunchPad ที่เร่งตัวขึ้น และการพัฒนาธุรกิจ อย่างไรก็ดี ได้เตือนว่าปีที่เริ่มบังคับใช้ PAMA จะมีความยากลำบากมากกว่าปีถัดๆ ไป
• การผนึกกำลังจากการควบรวมกิจการ: Labcorp คาดว่าจะใช้เครือข่ายห้องปฏิบัติการ ศูนย์บริการผู้ป่วย ขนาดการจัดซื้อ การทำสัญญาผู้ชำระเงิน และโครงสร้างพื้นฐานการขายที่มีอยู่เดิม เพื่อปรับปรุงธุรกิจที่เข้าซื้อเมื่อเวลาผ่านไป ผู้บริหารย้ำว่าบริษัทได้ดำเนินการและรวมกิจการธุรกรรม BioReference สองรายการก่อนหน้านี้เสร็จสมบูรณ์แล้ว
• โอกาสการควบรวมกิจการ (M&A): ผู้บริหารอธิบายว่าโอกาส M&A ยังคงแข็งแกร่งในทุกพันธมิตรโรงพยาบาล ตลอดจนห้องปฏิบัติการท้องถิ่นและระดับภูมิภาค โดยระบุว่า PAMA อาจกระตุ้นให้ห้องปฏิบัติการขนาดเล็กกว่าพิจารณาทางเลือกเชิงยุทธศาสตร์ของตนใหม่อีกครั้ง
• อุปสงค์ของ BLS: ยอดจองของห้องปฏิบัติการส่วนกลางได้รับการสนับสนุนจากลูกค้ารายใหญ่ในกลุ่มเภสัชกรรม ข้อบ่งชี้โรคเฉพาะทาง และกิจกรรมด้านโรคหัวใจและเมแทบอลิซึมที่เติบโตขึ้น ผู้บริหารคาดว่าผลการดำเนินงานด้าน Book-to-Bill พื้นฐานจะยังคงแข็งแกร่ง แม้ว่ายอดจองรายไตรมาสอาจมีความผันผวนได้
• ธุรกรรม Myriad Genetics: Labcorp ได้เน้นย้ำถึงบริการตรวจ FirstGene single-gene NIPT ว่าเป็นสินทรัพย์ทางยุทธศาสตร์สำคัญที่สามารถนำมารวมกับพอร์ตโฟลิโอสุขภาพสตรี ความสัมพันธ์กับลูกค้า และโครงสร้างพื้นฐานการดำเนินงานของบริษัท
• การบรรเทาผลกระทบจาก PAMA: โครงการ LaunchPad กำลังถูกเร่งดำเนินการ โดยมีมาตรการต่างๆ ที่เริ่มดำเนินการแล้วเพื่อเตรียมพร้อมสำหรับปี 2027 นอกจากนี้ Labcorp ยังคงพยายามแยกสัญญานอกกลุ่ม Medicare ออกจากตารางอัตราค่าธรรมเนียมของรัฐบาลอย่างต่อเนื่อง

บันทึกการประชุมแถลงผลประกอบการฉบับเต็ม

บทถอดเสียงฉบับเต็มของการประชุมทางโทรศัพท์ผลประกอบการ

คำชี้แจงจากฝ่ายบริหาร

Operator

Good day and thank you for standing by. Welcome to the Q3 2026 Labcorp Holdings Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Nickolo Russo, VP, Investor Relations. Please go ahead.

Nickolo Russo

Good morning, and welcome to Labcorp's Third Quarter 2026 Financial Results Webcast. With me today are Adam Schechter, our Chairman and Chief Executive Officer; and Julia Wang, our Executive Vice President and Chief Financial Officer. This morning, in the Events section of the Labcorp Investor Relations website at ir.labcorp.com. We posted both our press release and the supplemental financial presentation with additional information on our business and operations. We will also host a replay of this webcast on the IR website for 1 year.

On today's webcast, we will focus on our adjusted non-GAAP results for the third quarter of 2026, our capital allocation strategy and our updated financial guidance for the full year 2026. Our GAAP results and a reconciliation of the non-GAAP financial measures to the most comparable GAAP financial measures are available in today's earnings release and the supplemental financial presentation. Please see the use of adjusted measures section in the supplemental presentation for more information regarding our use of non-GAAP financial measures.

In today's remarks, the term organic growth excludes the impact from acquisitions, divestitures and currency as well as other strategic actions taken in the early development business. Our remarks will also include forward-looking statements, including, but not limited to, statements about our updated 2026 financial guidance and long-term financial outlook and the related assumptions of each. The expected impact of various factors on our business, operating and financial results, cash flows and financial condition, global economic and market conditions, our future business strategies the expected savings, benefits and synergies from acquisitions and other transactions and partnerships and our potential opportunities for future growth. Each of these forward-looking statements are subject to change based upon various factors, many of which are beyond our control. More information is included in our most recent annual report on Form 10-K and subsequent quarterly reports on Forms 10-Q and in the company's other filings with the SEC. We have no obligation to provide any updates to these forward-looking statements even if our expectations change.

Now I'll turn the call over to Labcorp's Chairman and CEO, Adam Schechter. Adam?

Adam Schechter

Thank you, Nickolo. Good morning, everyone. We appreciate you joining us today to review our third quarter 2026 results. Labcorp delivered another strong quarter, with 7% revenue growth driven by volume, margin expansion across the enterprise and 14.5% EPS growth. Our results reflect disciplined execution as we drive continued momentum in diagnostics, and biopharma laboratory services. With these strong results, we are increasing our 2026 guidance.

Before turning to the specifics of the quarter, I want to briefly address PAMA. We are disappointed by the recent announcement on the proposed fee schedule changes related to PAMA, which is expected to reduce Medicare reimbursement rates for hundreds of laboratory tests beginning in 2027. The preliminary fee schedule is not fully representative of the broader commercial laboratory market. The proposed rates rely on data from only 2% of all laboratories paid under Medicare Part B in 2024. And very limited data from physician office laboratories and hospital outreach laboratories. In our view, these payment cuts will threaten patient access to laboratory services. They will negatively impact patient care and innovation, and they will impact the viability of laboratories across the United States.

We previously considered PAMA-related reimbursement pressure in developing our '26 to '29 long-term outlook, and we are reaffirming that outlook today. With a strong underlying business momentum, our strong biopharma laboratory business and the business development opportunities before us, along with our LaunchPad initiatives, we remain very positive about the future. LabCorp continues to support the Results Act a solution with strong bipartisan support that we courage a sustainable and innovative laboratory diagnostic system in the United States.

Now let's turn to our strong financial performance for the third quarter. Revenue grew 7% to $3.8 billion. AOI margin expanded 60 basis points to 15%, adjusted earnings per share grew 14.5% to $4.78, and free cash flow was $412 million. Moving to our segments. Diagnostics revenue increased 6.5% to $2.9 billion. Biopharma Laboratory Services revenue increased 8.5% to $867 million, driven by continued strength in central laboratories. Our BLS book-to-bill was 1.13 in the quarter, and 1.10 in the trailing 12 months. Julia will talk more about our strong results and increased 2026 guidance in just a moment.

At our Investor Day, we laid out the next phase of Labcorp's strategy and the priorities we believe will drive attractive growth over the long term, beginning with leading in specialty testing. As new therapies emerge, particularly in high-growth specialty areas like oncology, neurology, autoimmune disease and women's health. Labcorp's testing solutions are integral for drug development, diagnosis, therapy selection and ongoing disease monitoring. Our specialty testing business continues to grow about 3x faster than the broader diagnostics market. Importantly, this growth creates a halo effect for our core laboratory business. As physicians often order specialty tests alongside other Labcorp tests for their patients, driving volume growth across both specialty and core diagnostic testing.

During the quarter, we expanded our leadership position across important high-growth specialty areas. In oncology, we meaningfully advanced precision medicine. We announced FDA approval of a companion diagnostic, supporting patients with advanced melanoma. This approval supports treatment decisions for both patients and providers and demonstrates the capabilities of our PGDx platform, strengthening our position in companion diagnostics. This platform can support future companion diagnostic opportunities, and we are seeing increased interest from our biopharma clients. We also announced a collaborative clinical study with the Knight Cancer Institute at Oregon Health and Science University, evaluating Labcorp's plasma detect genome, MRD test, to detect muscle invasive bladder cancer reoccurrence, a significant clinical challenge despite advances in treatment.

Moving to neurology. New therapies, blood-based biomarkers and an increasing understanding of neurodegenerative disease, are enabling earlier diagnosis, more for treatment decisions and improve patient care. Labcorp is a leader in this space. And our neurology portfolio spans Alzheimer's disease, Parkinson's disease, ALS, multiple sclerosis, epilepsy stroke and other neurological conditions. Subsequent to the quarter, we launched an FDA-cleared pTau217 test for Alzheimer's disease available in both primary and specialty care settings. This launch will help bring Alzheimer's testing to clinical practices, enabling earlier and more accessible detection. This test will also strengthen our position in one of the fastest-growing areas of specialty testing.

Beyond our specialty focus areas, we continue to leverage science and innovation to address many important health care needs. For example, we launched a hepatitis D reflex test to support earlier detection of the most severe form of viral hepatitis. We announced the collaboration with Waters Corporation, that positions Labcorp as the first commercial laboratory to offer the FDA-approved BD Onclarity HPV assay across clinician and self-collected screening options, including in-clinic patient service center and at-home settings. Focusing now on the priority of being a partner of choice for health systems and leading pharma. Partnerships and acquisitions expand access to testing capabilities and allow us to bring the benefits of scale, science and operational excellence to customers.

During the quarter, we acquired MLM Medical Labs, expanding our global central laboratory capabilities. This acquisition establishes Labcorp as the only central laboratory provider with a wholly owned laboratory network across 4 continents, North America, Europe, Asia and Africa. We also partnered with the National Association of Community Health Centers to strengthen leadership development, support practice improvement and advanced community health initiatives across the nation's community health center network. Subsequent to quarter end, we signed 3 acquisition agreements, each of which is expected to meet our financial criteria of being accretive to adjusted EPS in the first year and returning the cost of capital by year 3. The timing of each of these is subject to regulatory approvals and customary closing conditions. These include an agreement to acquire select assets of bio references health laboratory testing business.

An agreement with Myriad Genetics to acquire their prenatal health testing business, which includes the prequel, Foresight, sneak-peak and first gene tests and an agreement to acquire Millennium Health, an accredited specialty laboratory with 1 of 15 years of experience in drug testing and surveillance. We continue to have a strong pipeline of partnership and acquisition opportunities that support our long-term growth strategy. We look forward to discussing it with you in the future. Moving to personalized health solutions, which encompasses both precision medicine and consumer health. In addition to several new companion diagnostics, we also launched solutions that help consumers better understand, manage and improve their health.

In the quarter, Labcorp On-Demand launched our Advanced Health panel and the Marker by Labcorp Genetic Health Panel. With our 140 panels and tests across many conditions, we provide insights to consumers to understand their health over time. We also announced a collaboration with Thrive Global to launch the Thrive 5 Health Test on Labcorp's On-Demand. A test that combines lab results with other health biomarkers to help improve cardio metabolic health. In addition to the results, consumers receive personalized educational content and a practical action plan. These examples demonstrate the value of Labcorp's lab testing capabilities to deliver more meaningful insights for consumers.

Shaping our future through technology and innovation continues to be a focus of our organization. Our advanced technology solutions include the My Labcorp app, test finder and increased automation in our laboratories using robotics, digital pathology solutions to improve customer experiences to enhance productivity and to help transform our business. In the quarter, our central laboratory service business launched the next generation of Labcorp's Global Trial Connect, helping pharmaceutical sponsors and investigator sites more effectively navigate growing clinical trial complexity, reinforcing our commitment to delivering differentiated technology-enabled solutions for our customers. The strength of our technology strategy and continued focus on innovation was recognized by Forbes, which named Labcorp to its list of America's best employers for tech workers.

With that, I'll hand it over to Julia to discuss our financials in more detail.

Julia Wang

Thank you, Adam. Our third quarter results represented strong execution and continued progress against our strategic priorities. Enterprise revenue grew 6.9% versus prior year. Adjusted operating margin expanded 60 basis points, primarily driven by organic revenue growth and operating efficiencies. Adjusted earnings per share grew 14.5%, and we generated $412 million in free cash flow. These results demonstrated the earnings leverage in our business as solid organic growth disciplined execution and productivity improvement translated into margin expansion and double-digit earnings growth. We remain active in cargo deployment with $256 million in acquisition and $58 million in dividends. We ended the quarter with $262 million in cash and $5.9 billion in total debt. As approved by our Board of Directors, we currently have approximately $1.4 billion remaining in our share repurchase program, providing continued flexibility to return capital to shareholders.

Moving to more details on the quarter. Enterprise revenue was $3.8 million, up 6.9% from the third quarter of 2025. Organic revenue growth was 5.5%. Net acquisitions contributed 1.5% of growth, partially offset by foreign currency translation of 0.1%. Adjusted operating income was $570 million or 15% of revenue compared to $513 million or 14.4% of revenue last year. The adjusted tax rate was 22.9%, in line with last year. We continue to expect our full year adjusted tax rate to be nearly 23%. Adjusted EPS was $4.78, up 14.5% from last year. Free cash flow was $412 million compared to $281 million last year. The increase was primarily driven by the improvement in working capital, partially offset by planned increases in capital expenditures. Our strong cash generation provides continued flexibility to invest in the businesses while maintaining a disciplined approach to capital deployment.

Turning to our segments. Diagnostic laboratories continued to perform well. Revenue was $2.9 billion, up 6.5% compared to the prior year. We delivered organic revenue growth of 4.4%, consisting of 3.1% volume growth and 1.3% favorable price/mix, largely driven by higher tax per accession. Acquisitions contributed 2.2% to revenue growth. Diagnostics adjusted operating income was $492 million or 16.7% of segment revenue compared to $450 million or 16.3% of revenue last year. The combination of healthy organic growth and continued operating efficiencies drove 40 basis points of margin expansion in an diagnostics.

As Adam mentioned, subsequent to the quarter end, we entered into agreements to acquire select assets of BioReference Health, Myriad Genetics Prenatal health testing business and the Millennium Health, in addition to being a strong strategic fit, each of these transactions is expected to meet our acquisition financial criteria of being accretive to adjusted EPS in year 1 and returning cost of capital by year 3. As typical with all of our acquisitions, we expect this transaction to become more accretive over time as we fully integrate. Related to the BioReference cost transaction, we would expect to generate $250 million of revenue in the first 12 months. At adjusted operating margin slightly higher than the Diagnostics segment average, resulting in approximately $0.15 of adjusted EPS, including financing costs.

We currently expect a midyear 2027 growth. subject to regulatory approvals and customary closing conditions. As it relates to the Myriad Genetics transaction, we expect to add approximately $160 million in revenue and to be slightly accretive to adjusted EPS in year 1 and to reach average diagnostics segment margins by end of year 2 was fully integrated. We currently expect an early 2027 close, subject to regulatory approvals and customary closing conditions. BLS revenue was $867 million, up 8.5% compared to last year. Organic constant currency revenue growth was 9.6%. The strong organic growth was partially offset by the strategic actions in early development of 1.2%, and acquisitions offset the impact of foreign currency translation. Within the BLS segment, on an organic constant currency basis.

Central Labs Services delivered strong revenue growth of 11.3% and early development grew 5%. The strong growth in Central Line was essentially driven by a healthy underlying demand. while favorable timing related to study stores in the quarter also contributed. BLS segment adjusted operating income was $159 million, or 18.3% of revenue compared to $132 million or 16.5% of revenue last year. Adjusted operating margin expanded 180 basis points, driven by organic growth and operating efficiencies from the strategic actions we have taken in early development. Our BLS segment end date to the quarter with a backlog of $8.9 billion. We expect approximately $2.8 billion to convert into revenue over the next 12 months. Quarterly book-to-bill was strong at 1.13, translating into a strong trailing 12-month book to bill of 1.1. The combination of robust organic growth, significant margin expansion and healthy book-to-bill reinforces our confidence in the trajectory of BLS.

Turning to our full year 2026 guidance. Strong year-to-date execution and continued business momentum give us increased confidence in our outlook. As a result, we are raising the midpoint of our 2026 enterprise revenue range and adjusted EPS range by $65 million and $0.18, respectively. The increase in our outlook reflects a strong branding business performance, partially constrained by approximately $10 million in incremental foreign currency headwinds versus our prior guidance. Enterprise revenue is expected to grow 5.9% to 6.7%, which represents a 50 basis point increase at the midpoint. The guidance includes a 30 basis point benefit from foreign currency translation versus a 40 basis point benefit in our prior guidance. Diagnostics segment revenue is expected to grow 5.5% to 6.2%. This is a 20 basis point increase at the midpoint. We continue to expect the majority of the growth to be driven by organic performance.

BLS segment revenue is expected to grow 7.4% to 8.4%. We have raised the midpoint of our BLS revenue guidance by 190 basis points, primarily driven by continued strength in Central Labs. The current guidance includes a 130 basis point foreign currency tailwind compared with a 150 basis point tailwind in our prior guidance. For the full year, on an organic cost and currency basis, we now expect Central Labs revenue to grow in the high single digits and continue to expect early development to grow in the low single digits. We continue to anticipate enterprise margin expansion for full year 2026, driven by both diagnostics and BLS relative to 2025. At the enterprise level, LaunchPad continues to deliver productivity improvement and remains on track for the $125 million full year savings target. Our adjusted EPS guidance range is $18.30 to $18.70, with an implied growth rate at the midpoint of 12.5%.

Our free cash flow guidance range remains $1.24 billion to $1.36 billion. We continue to expect capital expenditures to be nearly 4% of revenue. Our full year guidance assumes foreign exchange rates as of September 30, 2026. The guidance also reflects our current capital allocation assumptions, including the use of free cash flow for acquisitions, share repurchases and dividends. As we look towards 2027 based on the preliminary fee schedule proposed by CMS, we estimate the impact of PAMA to be approximately $125 million, and we expect to offset a portion of that impact. With our underlying business momentum in diagnostics, strong biopharma business, versus development opportunities and large plan initiatives. We remain very positive about the prospects of 2027, and we look forward to providing 2027 guidance in February.

Now I will turn the call back to Adam for closing remarks.

Adam Schechter

Thank you, Julia. Let me close with a few takeaways. First, we delivered another excellent quarter with strong revenue growth, margin expansion and double-digit adjusted EPS growth. Second, we are translating the strategy we laid out at Investor Day into execution, strengthening our leadership in specialty testing, expanding strategic partnerships and acquisitions, accelerating personalized health solutions and leveraging technology to improve performance. And third, as a result of our performance, we are increasing the midpoint of our full year guidance for revenue and EPS and expect to move into 2027 with solid momentum. We are confident in our strategy. We're encouraged by the opportunities ahead of us, and we are well positioned for continued strong performance moving forward.

Operator, we will now take questions.

Operator

[Operator Instructions] Our first question comes from Erin Wright of Morgan Stanley.

ช่วงถาม-ตอบ

Erin Wilson Wright

So I have a question about margins and margin progression into next year and kind of where things land. Just given in the context of PAMA in the 75 to 150 basis points of margin expansion over 3 years that you laid out at the Investor Day, and also looping in sort of the acquisitions that you recently announced, how do you think about that margin cadence, particularly in 2027? Can you expand margins next year? And what are some of those moving pieces on that front if PAMA is implemented and obviously, those deals close?

Adam Schechter

Yes. Thank you, Erin, for the question. And the good news is we have a lot to talk about here. We have continued strong momentum in our business. If you look at our Diagnostics business and you look at margins, we've increased our margins for many quarters in a row now. And we expect, if you put PAMA aside that we will continue to improve those margins as we move into the future. Obviously, we'll wait to see what happens to the PAMA and the results tax. Obviously, the year that PAMA is introduced, will do as much as we can to offset PAMA. I think we have 4 strong levers to do that. the underlying diagnostic business, the strength in our biopharma laboratory business, the Launchpad initiatives that we'll continue to push really hard, particularly in a PAMA year and also the business development opportunities that we've announced, and we have others before us. So all those things will help offset the impact of PAMA. But obviously, the year that PAMA is implemented will be a tougher year than the other years. It will get easier after the PAMA years.

It also depends on the timing of the business development. And when we close those deals. We expect each one of them to be accretive in the first year, so they should be helpful in terms of accretion, but it takes a bit of time before the margins get to our average margins. For example, the Myriad deal, which is a great deal would not have margins reach our average margins until the end of year 2. So it would take a little bit of time for the margins to get there, and it really depends on the exact timing of those deals. For example, for the Myriad deal, we expect it to happen in early 2027. So we'll provide exact guidance in February of next year. But what I'll say is we are confident that we're moving into 2027 with momentum. We reaffirmed our guidance today even after giving what we expect PAMA to be in year 1. So it tells you that we're confident in the margin expansion over time.

Julia Wang

Erin, maybe to add a bit more color. As it relates to margin, we're very pleased with the progression we have made as an enterprise. Actually, Q3 represented the sixth consecutive quarter of margin progression across the enterprise, inclusive of the 2 operating segments. The other fact I would share is that when you step back, look at the fundamental drivers of our margin expansion, it really bodes down to strong organic growth for both operating segments particularly in the leading diagnostic and CLS business is our relentless focus on operating efficiencies through our launch plan initiatives. And of course, this year, we also benefited from the strategic actions that we have taken in early development. And as Adam also shared just now, when you look at 2027, we really have multiple levers that we can really pull weather through the continued strength in diagnostics or continue the momentum in BLS. But the business development will be another lever in addition to our focus on launch plan, which we will be leveraging advanced technologies to help us fundamentally driving the cost out of the system in a sustainable way of working. So all in all, we are looking forward to wrapping up 2026 with really strength going into 2027 with momentum, so stand with more guidance coming in February of 2027.

Operator

Our next question comes from Lisa Gill of JPMorgan.

Lisa Gill

I want to follow up on those comments on the business development side. Adam, you've done 4 deals here in the last couple of weeks. Can you maybe just talk about what you're seeing currently in the pipeline, number one; two, we've had some questions from investors about the margin progression for some of these acquisitions because inside of some of the current companies, they're not accretive. So can you maybe help people to understand is it that you just convert that to the contracts you have with managed care, and that's why you have the visibility around how the margin profile will look for the business development? And then just lastly, anything else you would want to share as we think about an M&A pipeline as we go into '27. Is it increasing? Do you see incremental opportunities? Just how do we think about business building?

Adam Schechter

Sure. Thank you, Lisa. So first of all, the pipeline remains strong. And it's interesting. I've been talking about the strong pipeline for some time now and several people sit out and we keep talking about it, one of these deals going to happen. I think this just shows you can't control the exact timing of deals. But when the pipeline is strong, the deals will come. We have other deals in the pipeline. I'm excited about that pipeline. We expect to have more announcements and the future as we move forward, the pipeline remains strong. The interesting thing about PAMA, where, on the one hand, it has a significant impact to us in 1 year. I think it also increases the pipeline for business development. I think smaller hospital laboratories, regional, local laboratories, they're going to struggle a lot with PAMA, and it really does cause them to rethink about their business.

The second question regarding the individual deals and margin expansion. I would say each of these deals are a little bit different. MLM is a deal that was for our central laboratory business, it expands our capabilities. It gives us a presence in a part of the world where clinical development is very strong. And it's a very separate part of our business that's integrating that deal. If you look at the other 3 deals, we'll start with the Myriad deal, which I think is a very good deal for us because it's in women's health. It's an area we know well. It brings new tests to us. The FirstGene, the Prequel, the Foresight, the SneakPeak, they're all good women's health products that we can add to our existing portfolio of products. And we already have sales forces. I think that together we can reach more patients, we can improve access. We can bring new tests that we don't currently have to the patients that need those tests in the physicians that want those tests. So it will actually be a very competitive environment of which we can now compete much more effectively with these tests than before. It will be accretive in the first year. It follows nicely to a business we know how to run. We've done deals with Myriad before, so we know how to work with them and how to integrate. So it's an exciting opportunity for us.

If you look at the Millennium deal, that's a part of our business that's a separate business unit. We do very well in that business. But this increases our presence in parts of the country that we don't have a presence in or we don't have a strong presence right now. So it's a business we know how to run. It's a business we've been involved in for many years, and it just expands our geographic footprint and enables us to be more competitive, improve access to a part of the country that we don't have as much access as of today. And if you look at the BioReference deal, we've done 2 deals with them already. We know how to work with them very well. We've worked with them on integration, so we know how to integrate with them very well. They have a presence at the country that we're not as strong. And so, it increases our relevance in parts of the country where we want to increase our presence, increases access, and we know how to work with them to integrate the business well into our existing business. So the timing, we tried to give you a sense of what those timings were Myriad, early 2027, while referenced mid-2027, Millennium later this year. And then based upon the timing, we would expect that margins would be accretive to earnings in the first year, margins improve over time.

Operator

Our next question comes from Ann Hynes with Mizuho.

Ann Hynes

Staying on that women's health topic. I know we've seen some meaningful changes in cardiovascular screening recommendations from the AHA and the American College of Cardiology I think in March, they expanded testing for certain patients. But yesterday, they really expanded recommendations from Women's cardiovascular health. When major organizations like this do change the recommendations? How should we think about the potential impact for you? Do physicians typically change their ordering patterns quickly? Is there like a lag time and adoption time and just from an insurance perspective, if some of these tests are uncovered, do they usually start covering them because of these organizations, recommendations?

Adam Schechter

Yes. No, thank you, Ann. I think women's cardiovascular health has been something that I personally focused on for a long time, and I'm glad to see that it's now being focused on by these are this societies and so forth. It's an underdiagnosed disease, particularly in women. It goes undiagnosed in a way in which it presents itself cardiovascular disease. And I think there's a lot more that we can do to enhance the health of cardiovascular health of women. So it's nice to see that the societies will move in that direction. I would say many physicians have already moved in that direction. I've already begun to screen women for cardiovascular. They teach women how cardiovascular disease prevents very differently at times in women versus men. And I think that we've seen a movement to actually improve cardiovascular health and women already.

Separate and distinct from that, when societies provide recommendations, I do think it's a way for us to reinforce with payers the importance of paying for those tests. I do believe that physicians will tend to prescribe more of those tests faster when they become a core recommendation of a very strong society. or group of highly thought of physicians and thought leaders. So I do think it's helpful, although when you do 750 million tests per year, it's hard to kind of pull out any type of change like this I do think that it's for benefit of women. I do think it will help us over time.

Operator

And our next question comes from Eric Coldwell of Baird.

Eric Coldwell

Congrats on really nice results and outlook. I'm probably going to deliver my worst question of the quarter here because there's a lot -- so we actually like your deals. You've been very clear about the capital deployment, but I have been particularly concerned about the BioReference, the BRL deal because we do have their financials, we know the revenue that you expect. I think we have a reasonable estimate on cost of capital, et cetera, et cetera. And it was very hard for me to initially come up with year 1 accretion on that deal, particularly when the first quarters are typically well below what your exit rate is post synergy. So help me figure out what I'm missing here. is there like a tax benefit driving that $0.15 of accretion because at face value, rough scratch pad on the math, it looks like you're actually guiding to a year 1 operating margin of something like 22% or 23% to get to $0.15 of accretion. And I'm just -- tell me what I'm missing on this because that's, quite frankly, a lot better than I expected.

Adam Schechter

Yes. So once again, BRL is a company that we've worked with. We've done 2 deals with. So we understand their systems, we understand their cost structure. We understand the way in which they do business very well. And when we looked at the business there in geographies where we think we can increase access, we can bring our kind of testing capabilities more broadly. And there are in areas, frankly, we're not as strong and where they were strong. Overall, when we gave the revenue estimate, we've included the impact from PAMA. That could be in there. We've included some other things in terms of where the revenue we expect to be in the year versus what they might have reported before. We also have a very good handle on what their cost structure is and what that would look like in our hands versus in their hands. I don't know, Julia, if there's anything you would add to that.

Julia Wang

Yes. I think, Adam...

Eric Coldwell

Just Julia, I appreciate any comments you make. I guess I just want to -- I think, if I remember, they have something like 80 service centers. Are you planning to just do like big consolidations here drive all of their volume to your lab in the area. I'm just -- anything you could help us with on the synergy path and the cost path would be helpful to stage the concerns that at least I had.

Adam Schechter

So over time, when it comes to the service centers, where there's overlap, we'll decide which service center is best to keep. So it could be that we closed down some Labcorp service centers could believe that we closed down somewhere else. But where there is overlap, we would look, obviously, to have synergies. We also will be able to look at the capacity in their laboratory, the capacity we have in our Raritan laboratory, both of which are close to each other. And where we were going to expand because of our business development growth opportunities, we might not have to expand in areas that we had before or we'll look to say other synergies there as well. So it could be a reduction of the expansion that we were planning based upon the number of deals that we've done this part of the country. So I think that you'll find synergies across the business, Eric. But in addition to that, I just believe when you look at contracting and stuff like that, there's always things that are helpful.

Julia Wang

Yes. I believe Adam has covered the ground. I think the only thing I would say is that, as Adam already said, because we have had this long-term partnership with BioReference with 2 prior acquisitions already having been successfully integrated and demonstrated our ability to really deliver against our expectation as it relates to return on investment. So we are feeling very comfortable with the outlook that we put out there as it relates to the first year contribution. And actually, if you look at the few transactions was just announced subsequent to the quarter end, they are all tucking in nature, whereby we have a very proven track record of successfully integrating them into our extensive operating scale and infrastructure and then being able to really drive synergistic value through both growing the top line and also optimizing the cost structure. So we look forward to updating you as we continue to make progress, but we're confident ability to really continue to drive acquisitions to contribute 1.5% to 2.5% revenue growth for our overall growth trajectory, but also continue to drive more operation over time as we fully integrate those transactions.

Adam Schechter

And the last thing I would say, Eric, is when you look at our procurement capabilities, you look at our cost based upon the scale of what we do, all of that comes into play and is helpful as well.

Operator

Our next question comes from Michael Cherny of Leerink Partners.

Michael Cherny

One just quick housekeeping and then one additional question. First, just on the change in revenue guidance. Can you just remind us how much is from M&A in terms of what's built into the update for the year? And then relative to PAMA, Adam, I think we all hear you completely on your view on the Results Act and the logic behind it. That being said, it is a tough environment in D.C. Can you just give us a flavor as you think about the offsets for '27, what the organization is starting to do now to prepare for that?

Julia Wang

Michael, let me start addressing the question as it relates to the guidance you raised I would say that the risk is driven by strength in the organic performance of our businesses. So if I break it down segment by segment, starting with an ad, we raised the midpoint of our guidance by 190 basis points, $59 million on an absolute basis. And in addition to strength in organic performance, particularly in SMS. We also shared in the release that we have about 10 basis points of FX headwind when you look at this guidance versus prior guidance and that the FX impact was actually offset by expected contribution from the MLM acquisition that we closed in September. And then if you were to move to the Diagnostics segment, we raised the midpoint of our guidance by 20 basis points and $22 million on an absolute basis I would say there's a little bit expectation about potential revenue contribution from the Millennium Health acquisition, which we expect to close later in this year, but it's very minimal in the scheme of things, I would really consider that as immaterial. In short, we are reaching the midpoint of our guidance for the full year from a revenue perspective by 50 basis points, $65 million. And if you neutralize FX, it would be a rise of 60 basis points and $75 million, all driven by strength in the organic performance of our businesses.

Adam Schechter

And then regarding PAMA, obviously, we remain disappointed by the recent announcement. But in our base case, we're going to assume that PAMA happens next year. That is a $125 million impact from the traditional Medicaid, Medicare segment. We're still cautiously optimistic about results. We'll still continue to fight for that. We'll fight for delay if results doesn't get past this year. But in our base case, we want to assume that it does happen next year. So if you look at the 4 things that we're doing to offset it, one is the underlying diagnostic business is strong, and we will continue to focus on it. The volume looks good. Our strength is there. So the underlying business, we expect to remain strong. The second thing is our BLS business continues to remain strong, and we're going to continue to focus on that to grow that business. The book-to-bill looks great. So that's another way to offset part of it. .

Our LaunchPad initiatives, we're accelerating. And we're already focused on that. We have things underway that we're putting in place in fourth quarter to prepare for first quarter, we'll give you the exact amount. But you saw at Investor Day, we raised our expectation of what we expect for LaunchPad from prior guidance. So it's meaningfully higher now than it has been in the past, and we're accelerating our efforts as we speak today. And then the fourth thing is the business development, which you've seen us announce for business development, things in the past month or so, and there's more to come. We're continuing to have a very strong pipeline. There's a lot we can do there. You can't accelerate those per se, but we continue to focus on those other opportunities, and I would expect that there's more to come in the not-too-distant future

Operator

Our next question comes from Luke Sergott at Barclays.

Luke Sergott

I just want to talk on the biopharma services and the demand that you guys are seeing. You had really strong pickup there in bookings. I understand it was a little bit easier comp, really nice acceleration there. And so your conversion is also kind of picking up as well. Can you just walk through the dynamics where you're seeing the demand? Is it like any particular indication or therapy and just give us an overlay of how that visibility into that continuing through the beginning of next year?

Adam Schechter

Yes. So if you look at the central laboratory business, in particular, had very strong growth. And in the quarter, the growth was driven by healthy underlying demand. We also had some favorable timing related to study starts in the quarter, but it's mostly the underlying demand. As you look to the book-to-bill, as you said, it is strong. And I would say that it's strong in both our central laboratory business, but also in our early development business. In our central laboratory business, it's driven by large pharma. And it's driven by not only oncology and specialty areas where we've seen growth in the past, but we are seeing an increase in cardiometabolic areas. And when you look at the GLP-1s and a number of different trials and types of trials, we are seeing some accelerated opportunities in that area as well. .

When it comes to early development, we're seeing that the funding environment looks pretty good. It's driven by smaller biotechnology companies, but we are trying to change that a bit by getting more large pharma business in that area. And we are beginning to see some early signs of success in doing that. So in summary, both businesses are doing well. The business is driven by central laboratories. Central Laboratories book-to-bill looks really strong. Specialty areas, particularly oncology, continues to grow, but we're seeing more growth in areas like cardiometabolic.

Luke Sergott

Great. And then a follow-up on that. I mean, as you look, demand continues to pick up. Can you talk about what you're seeing from a capacity expansion in the industry? And if that's -- how tight is that getting? And then obviously, it would bode well from a pricing perspective as we think about the out years?

Adam Schechter

Yes. So as I look at our capacity, we continue to have plenty of capacity. So we have a very large footprint. We have Central Laboratories now in 4 continents of wholly-owned subsidiaries, but we also have access to other parts of the world, and we're increasing our access in other parts of the world like, for example, in Latin America. So our geographic presence, our ability to have these large laboratories gives us capacity for even more growth as we go into the future. So I'm not concerned about our ability to take on new business. In fact, we're looking for as much new business as we can get moving forward.

Julia Wang

And look, earlier, we shared that we are in the process of building a state-of-the-art lab facility in Indianapolis. Actually, that is in response of anticipated continued momentum growth, particularly for the CLF business. So we're in the middle of that engagement right now, and that is reflected in our capital expenditure for this year and the next couple of years.

Operator

And our next question comes from Tycho Peterson of Jefferies.

Tycho Peterson

I want to follow up on the Myriad deal. You are buying the assets after the management team talked about a 60% revenue decline, share loss and payer friction, and that was all before the CLF rate proposal, which is an additional drag on revenue. So why is now the right time to do that deal? And why are you the right partner to turn around that business?

Adam Schechter

Yes. No, great question, Tycho. We feel very comfortable and confident in taking over that business. In fact, it's a very strong business for us today, but they have, in particular, the FirstGene test, which we think has tremendous opportunity. So it's newly launched. It's an innovative single gene NIPT solution. It screens for chromosomal conditions, select single-gene disorders, maternal carrier status and R&C compatibility. So it's going to compete really well in the fastest-growing part of the segment where we don't necessarily compete today. So taking our strong existing tests and infrastructure and relationship with customers and our scale. Now combining it, in particular, with this new test, which will compete in a very competitive part of the market, I think, bodes well for us to be the right group to launch that and also the right time to launch it because that market is still being defined, and we think we could be a winner ultimately.

Tycho Peterson

Okay. That's helpful. And then one quick follow-up on BLS. I appreciate all the momentum and strength you're seeing, especially on the pharma side. I guess as we think about biotech funding getting a little softer here, how do you think about the impact there on early development?

Adam Schechter

Yes. So again, the early development business, much smaller, much less important part of our business, but it is performing well right now. We've made some good strategic moves. We're seeing our RFP is strong there. The study starts are strong there. We're trying to kind of switch more of our load to larger pharma, and we're seeing some early signs of success. So I feel good about where we are today.

Operator

Our next question comes from David Westenberg of Piper Sandler.

David Westenberg

So I'm going to ask a question about PAMA, I prepared for a bunch of questions on Myriad and first and all that, but it seems to be a lot of acquisition. So I'm going to pivot to PAMA, sorry if the question is bad because I was preparing for something else. But I want to talk about PAMA from kind of a multiyear perspective. We know the worst part is obviously in year 1, which is the 2027, though it does look like a number of tests above that 15%, which kind of suggests there could be some headwinds into '28 and '29. Can you talk about the strategies both from a Labcorp perspective? And kind of how you anticipate industry might change and the way they're thinking about contracting or discipline or any other approach that the industry and at Labcorp again is going to take to maybe think about if indeed PAMA the law of the land, how just the industry might evolve and you evolve in terms of discipline and all that other kind of thing?

Adam Schechter

Yes. No, thank you for the question. And the majority of the impact is in 2027, the first year. And again, assumes that PAMA actually happens, which is our base case, but we're still cautiously optimistic about results and/or delay. There are incremental impacts in '28 and '29, but they are meaningfully less than what '27 would be. And I believe they're manageable and they're within what we should be able to manage in our kind of ongoing running of the business. As I think about over time, we continue to decouple other parts of our contract from referring to the fees drill, and we'll continue to do that. But I feel like 2027 will be the biggest impact, and we can manage through the outer years.

Operator

And our next question comes from Lu Li of Bank of America.

Lu Li

I guess maybe a question back to kind of like the organic growth and then the price mix in the quarter. The volume growth is very, very healthy. The price seems to be slightly lower versus 2Q. I wonder if you can talk about kind of like the growth driver within the volume? And then maybe just anything to call out on the price mix.

Adam Schechter

Yes. So if you look at the diagnostics business, it was very strong. We had 6.5% growth over last year. The organic growth was 4.4%. It was 2.2% that came from acquisitions. If you look at the organic growth, 3.1% was organic volume growth, which was very strong, and that's what we would like to see. Organic price/mix growth was 1.3% and it's driven by what we wanted to be driven by, which is an increase in test per accession and we expect test per accession to continue to increase as we go over time. If you look at any 1 quarter, I wouldn't look at any trend. You are going to see fluctuations between organic volume and organic price mix quarter-over-quarter. But over time, we expect them both to be strong.

Julia Wang

Yes. And maybe a little bit more considerations. If you look at esoteric revenue as a percentage of our total diagnostic revenue, it was about 38% in the first quarter of 2024, and in the third quarter of this year, it went up to 42%. So clearly, you can see the strength of our strategy and execution. And then when you look at the full year guidance for diagnostics, at the midpoint, the revenue growth was 5.9%, and we continue to expect the majority to be coming from organic performance. And within that, we expect the volume growth to slightly outpace price mix variability.

Operator

And our next question comes from Kevin Caliendo of UBS.

Kevin Caliendo

Really happy about all the color on the deals that you had. It was just interesting to me that there really hasn't been a traditional hospital deal announced. I'm just wondering if this is more your own preference around what's happening in the marketplace and where the opportunity lies? Or is it just the availability of assets that are out there? Or is it just simply people are waiting on PAMA and want to know what the rules are going to be and what the economics look like?

Adam Schechter

Stay tuned. Again, you can't control the timing of deals. The pipeline looks strong. The pipeline looks strong for hospital deals, partnerships, local regional laboratories they're just timing things. So I would say that the deal pipeline continues to be strong. I do think PAMA comes it could get even stronger, but stay tuned and there's a lot that we're working on. It's a strong pipeline.

Operator

Our next question comes from Elizabeth Anderson of Evercore ISI.

Elizabeth Anderson

What -- I took maybe a 2-parter. Just any updates on your assumptions around the ACA impact on the business? And then two, any reasons why we wouldn't like continue to see the traditional 4Q seasonal step-up in BLS given some of the things you highlighted in one of the earlier questions?

Julia Wang

Elizabeth. In terms of the ACA impact, it was a slight headwind of about 30 basis points of diagnostic volume in the third quarter which was essentially in line with the second quarter, and we continue to expect a similar level of impact in the fourth quarter. Of course, we've already incorporated this into the updated guidance that we just provided this morning. It's also important to note that this particular insured population account for a very small percentage of our overall diagnostic volume is less than 4% to 5% overall speaking.

And then in terms of the cadence for the BLS business, I would say that if you look at the release, we just shared this morning, we have raised the midpoint of our guidance to the degree that at this moment, we expect on an organic currency basis, the SLS business to grow high single digits. And then the ED business to continue to grow in low single digits. So based on the strength of the momentum, we feel good about that guidance, and we look forward to continuing to march forward to deliver against that expectations.

Elizabeth Anderson

Yes, that make sense. And that would continue in bookings, too, I'm sorry if my question was unclear.

Adam Schechter

Again, we expect continued strength in bookings, but quarter-over-quarter, it does vary quite a bit. Sometimes things get moved into quarter on things get moved out of the quarter. And especially with pharma at the end of fourth quarter, you never know what pharma will be thinking. So the underlying book bill, we expect to remain very strong.

Operator

Our next question comes from Jack Meehan of Operon Research.

Jack Meehan

Adam, I was wondering just on the topic of PAMA. Can you remind me the actions that you've taken to disconnect the non-Medicare business from the fee schedule. And I just wanted to confirm the $125 million estimate. Does that assume any bleed through to other payers? How are you handling that?

Adam Schechter

Yes. No, thank you, Jack. So the $125 million is the traditional Medicare Medicaid. We've done a lot to try to decouple that over time. And we're going to continue to work on that. But the additional impact to me are things that you just manage within your day-to-day business, and that's what we would expect to do. and you always have some pushes and pulls that you work on. So the $125 million is the traditional Medicare Medicaid. There is some spillover into other parts of the business. We're going to manage that as we would manage other parts of our business.

Jack Meehan

Excellent. If I can squeeze in one more. Any updates on your progress towards launching the MRD test. And have you chosen which sequence you're planning to launch that on?

Adam Schechter

So we are continuing to make progress on the MRD test. In fact, we just announced the collaboration with Knight Cancer Institute of Oregon Health System. And that was a clinical study that's evaluating plasma detect genome, MRD Ultra, and it's really looking at reoccurrence for patients with muscle invasive bladder cancer. So we're continuing to look across the portfolio of MRD opportunities. This is just another example of us building data in order to support reimbursement over time. I remain very excited about our portfolio of products. And to my knowledge, I don't believe we've finalized working with any one machine yet at this point in time.

Operator

This concludes our question-and-answer session and also today's conference call. Thank you for participating, and you may now disconnect.