Labcorp NYSE: LH reported first-quarter 2026 results management described as a “strong start” to the year, citing revenue growth, margin expansion, and progress across strategic priorities in diagnostics, biopharma laboratory services, specialty testing, consumer health, and technology initiatives.
First-quarter results: revenue up 6% and margins improved
At the enterprise level, Chairman and CEO Adam Schechter said revenue reached $3.5 billion, increasing 6%, while “margins improved more than 30 basis points” and adjusted earnings per share grew 11%. CFO Julia Wang reported enterprise revenue grew 5.8%, with 3.1% organic growth, 1.4% from net acquisitions, and 1.3% from foreign currency translation. Enterprise adjusted operating margin expanded to 14.4% from 14.0% a year earlier, and adjusted operating income rose to $508 million from $469 million.
Adjusted EPS was $4.25, up 10.6% year over year. Wang said free cash flow was $71 million compared with a $180 million use of cash in the prior-year quarter, adding that the first quarter is typically Labcorp’s lowest quarter for free cash flow.
Diagnostics: volume affected by weather; mix improved
Diagnostics revenue increased 5% to $2.8 billion. Wang said the growth included 2.9% organic growth, 2.0% acquisition-driven growth, and 0.2% from foreign exchange. Total volume growth was 2.5%, including 1.1% organic volume growth and 1.4% acquisition-driven growth.
Management pointed to adverse weather as a headwind. In response to a question from J.P. Morgan’s Lisa Gill, the company estimated weather had roughly a $15 million impact in the quarter, and Wang said organic volume growth would have been closer to 2% excluding the weather effect.
Price/mix rose 2.6%, including 1.8% organic price/mix, which Wang attributed primarily to an increase in tests per session. Schechter also emphasized the role of specialty testing in mix, saying areas like neurology and oncology can mean “less accessions, but more tests per accession and a higher price per test.”
Diagnostics adjusted operating income increased to $459 million (a 16.6% margin) from $428 million (a 16.3% margin), a 30-basis-point improvement that Wang said was primarily driven by organic growth despite weather disruption.
Biopharma Laboratory Services: central labs drove growth; book-to-bill discussed
Biopharma Laboratory Services (BLS) revenue rose 8.2% to $781 million, including a 5.5% benefit from foreign currency translation. Wang said BLS delivered 3.7% organic growth, partially offset by 1% related to early development strategic actions. On an organic constant-currency basis, central labs revenue grew 4.9%, and early development revenue grew 0.7%.
BLS adjusted operating income increased to $121 million (a 15.5% margin) from $107 million (a 14.8% margin). Wang said the 60-basis-point margin improvement was driven by growth in central labs, which she characterized as the more profitable business within the segment. She also said early development strategic actions are expected to be “largely complete by the end of the second quarter.”
Schechter said central labs revenue grew 11% (or 5% excluding foreign exchange). He also noted Labcorp’s trailing 12-month BLS book-to-bill remained “healthy” at 1.04. Wang reported quarterly book-to-bill was 0.94, and said it is expected to improve sequentially in the second quarter. Schechter told Citi’s Patrick Donnelly the first-quarter figure was “mostly driven by timing,” with some awards shifting between quarters, and said he expects book-to-bill to remain above one over the rest of the year.
The BLS segment ended the quarter with a backlog of $8.6 billion, and Wang said the company expects approximately $2.7 billion to convert to revenue over the next 12 months.
Strategy updates: partnerships, specialty testing, consumer health, and AI
Schechter highlighted progress on partnerships with health systems and regional and local labs. He said Labcorp announced a “nationwide strategic collaboration” with Children’s Hospital of Philadelphia to expand access to advanced pediatric diagnostics. He also said the company completed the acquisition of select assets of Crouse Health’s Laboratory Alliance of Central New York, and executed an agreement with Crouse Health to manage inpatient laboratories. Schechter added Labcorp remains on track to close its acquisition of select outreach laboratory services from Parkview Health “in the very near future,” and said the company continues to have an active pipeline of hospital and regional/local laboratory deals.
In specialty testing, Schechter reiterated the company’s focus areas of oncology, women’s health, neurology, and autoimmune disease, and said these categories are expected to grow “2x-3x faster than the broader diagnostics market.” He said neurology posted double-digit growth driven by Alzheimer’s testing, and oncology also achieved double-digit growth supported by liquid biopsy launches and expanded access to MRD solutions.
Responding to Jefferies’ Tycho Peterson about reimbursement dynamics, Schechter said that in oncology, “the reimbursement aren’t necessarily quite where we’d like them to be at the moment,” but added he expects reimbursement to improve over time as more data and trials accumulate. He also said that winning specialty testing often leads to additional routine testing for those patients.
On consumer health, Schechter said Labcorp OnDemand continues to deliver double-digit growth and launched new tests in the quarter for insulin resistance and pancreatic function, along with customizable men’s and women’s health tests. He also announced “Labcorp Patient,” a secure mobile app launching in May, which he said will be available to “tens of millions of customers” and will include an AI assistant to simplify appointment scheduling and payments.
On technology initiatives, Schechter discussed an expanded collaboration with PathAI to deploy an FDA-cleared digital pathology platform across national anatomic pathology labs and hospital laboratory collaborations. He also cited partnerships with Amazon Web Services and Datavant on an “AI-powered real-world data platform” aimed at accelerating Alzheimer’s research, and a collaboration with Optum AI to streamline operations and improve patient and provider experiences.
Guidance raised modestly; capital deployment and policy topics addressed
Wang said Labcorp raised the midpoint of its full-year guidance, increasing the midpoint of the enterprise revenue range by approximately $30 million and the midpoint of the adjusted EPS range by $0.13. The company now expects:
- Enterprise revenue growth: 5% to 6.1% (including an approximate 40-basis-point tailwind from FX)
- Diagnostics revenue growth: 5.1% to 5.9%
- BLS revenue growth: 3.8% to 5.4% (including an FX tailwind of about 150 basis points and reflecting early development actions)
- Adjusted EPS: $17.70 to $18.35
- Free cash flow: $1.24 billion to $1.36 billion, weighted to the second half
Wang said capital expenditures are expected to be approximately 4% of revenue as Labcorp invests in a new strategic facility to support central lab services growth.
In the quarter, Wang said the company invested $202 million in acquisitions and returned capital through $98 million in share repurchases and $61 million of dividends. Labcorp ended the quarter with $981 million in cash, $6.3 billion of total debt, and $700 million remaining under its share repurchase authorization. She added the company closed a $750 million term loan to pre-fund the retirement of $500 million of senior notes due in June.
On fuel costs and inflation, Wang told Barclays’ Ashley Krezinski the company expects minimal impact, estimating an adjusted operating income impact of about $5 million to $10 million for the year based on early April fuel prices, and said this was reflected in updated guidance. She added the company does not explicitly bake weather assumptions into its forecasts.
Several policy issues were raised on the call. On Affordable Care Act exchange dynamics, Wang said the first-quarter impact was “immaterial,” but management continues to use its previously disclosed estimate of a 30-basis-point headwind to diagnostics volume for the year, noting it will monitor premium payment behavior and utilization.
On CMS’s CRUSH initiative, Schechter said Labcorp supports efforts to reduce waste, fraud, and abuse, but urged CMS to avoid unintended consequences such as limiting Medicare patient access or “punishing legitimate providers,” noting Labcorp worked with the American Clinical Laboratory Association and submitted a comment letter in March.
Regarding PAMA and the RESULTS Act, Schechter said Labcorp continues to advocate for the RESULTS Act as a “long-term permanent fix,” and said the ultimate impact of PAMA—if implemented—would depend heavily on how many laboratories, including hospital labs, participate in reporting. He said Labcorp will submit data as required.
Labcorp also announced it will host an investor day in New York City on September 10.
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.
Featured Stories
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Labcorp, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Labcorp wasn't on the list.
While Labcorp currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Wondering what the next stocks will be that hit it big, with solid fundamentals? Click the link to see which stocks MarketBeat analysts could become the next blockbuster growth stocks.
Get This Free Report
