What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-31 compared with 2025-08-01 · 121 added, 109 removed, 223 unchanged (51% of the section changed)

2 unchanged sentences

In this Quarterly Report on Form 10-Q (Quarterly Report), Labcorp ® Holdings Inc.

together with its subsidiaries (Labcorp or the Company) has made, and from time to time may otherwise make in its public filings, press releases, and discussions by Company management, forward-looking statements concerning the Company’s operations, performance, and financial condition, as well as its strategic objectives.

together with its subsidiaries (Labcorp, LHI or the Company) has made, and from time to time may otherwise make in its public filings, press releases, and discussions by Company management, forward-looking statements concerning the Company’s operations, performance, and financial condition, as well as its strategic objectives.

Some of these forward-looking statements relate to future events and expectations and can be identified by the use of forward-looking words such as “believes”, “expects”, “may”, “will”, “should”, “seeks”, “approximately”, “intends”, “plans”, “estimates”, or “anticipates” or the negative of those words or other comparable terminology.

48 unchanged sentences

discontinuation or recalls of existing products used in the performance of testing;

a failure in the Company’s information technology systems, including with respect to testing turnaround time and billing processes, the failure of the Company or its third-party suppliers and vendors to maintain the security of business information or systems or to protect against cybersecurity incidents such as denial of service attacks, malware, ransomware, and computer viruses, delays or failures in the development and implementation of the Company’s automation platforms, or adverse effects from the use of or regulation of artificial intelligence (AI) and machine learning tools, any of which could result in a negative effect on the Company’s performance of services, a loss of business or increased costs, delays in cash collections, damages to the Company’s reputation, significant litigation exposure, an inability to meet required financial reporting deadlines, or the failure to meet future regulatory or customer information technology, data security and connectivity requirements;

a failure in the Company’s information technology systems, including with respect to testing turnaround time and billing processes, the failure of the Company or its third-party suppliers and vendors to maintain the security of business information or systems or to protect against cybersecurity incidents such as denial of service attacks, malware, ransomware, and computer viruses, delays or failures in the development and implementation of the Company’s automation platforms, or adverse effects from the use of or regulation of artificial intelligence and machine learning tools, any of which could result in a negative effect on the Company’s performance of services, a loss of business or increased costs, delays in cash collections, damages to the Company’s reputation, significant litigation exposure, an inability to meet required financial reporting deadlines, or the failure to meet future regulatory or customer information technology, data security and connectivity requirements;

business interruption, increased costs, and other adverse effects on the Company’s operations due to the unionization of employees, union strikes, work stoppages, general labor unrest or failure to comply with labor or employment laws;

16 unchanged sentences

GENERAL (dollars in millions)

For the three months ended June 30, 2025, the Company’s revenues were $3,527.3, an increase of 9.5% from $3,220.9 for the corresponding period in 2024.

The 9.5% increase for the three months ended June 30, 2025, as compared to the corresponding period in 2024 was due to organic revenue of 5.4%, acquisitions, net of divestitures, of 3.5%, and favorable foreign currency translation of 0.6%.

For the six months ended June 30, 2025, the Company’s revenues were $6,872.4, an increase of 7.4% from $6,397.5 for the corresponding period in 2024.

The 7.4% increase for the six months ended June 30, 2025, as compared to the corresponding period in 2024 was due to organic revenue of 3.7%, acquisitions, net of divestitures, of 3.6%, and favorable foreign currency translation of 0.1%.

For the three months ended September 30, 2025, the Company’s revenues were $3,563.5, an increase of 8.6% from $3,282.0 for the corresponding period in 2024.

The 8.6% increase for the three months ended September 30, 2025, as compared to the corresponding period in 2024, was due to organic revenue of 6.2%, acquisitions, net of divestitures, of 1.7%, and favorable foreign currency translation of 0.7%.

For the nine months ended September 30, 2025, the Company’s revenues were $10,435.9, an increase of 7.8% from $9,679.5 for the corresponding period in 2024.

The 7.8% increase for the nine months ended September 30, 2025, as compared to the corresponding period in 2024, was due to organic revenue of 4.6%, acquisitions, net of divestitures, of 3.0%, and favorable foreign currency translation of 0.3%.

The Company defines organic growth as the change in revenue excluding the year-over-year impact of acquisitions, divestitures, and currency.

3 unchanged sentences

On July 4, 2025, the U.S.

government enacted in law the One Big Beautiful Bill Act (OBBBA), which includes provisions addressing regulations and federal funding affecting healthcare.

government enacted into law the One Big Beautiful Bill Act (OBBBA), which includes provisions addressing regulations and federal funding affecting healthcare.

These provisions include, but are not limited to, changes to Medicaid and the Affordable Care Act, and could lead to revised regulatory requirements and reduced federal funding.

The provisions of the OBBBA have different implementation timelines, with some effective in 2025 and others in succeeding years.

The Company is currently evaluating the impact of the OBBBA provisions that address such regulations and federal funding to determine the full scope of the legislation’s potential impact on the Company’s business and operations.

As a result of these changes, the Company could experience a decline in utilization of its diagnostic testing services due to a reduction in overall insurance coverage, which may cause the Company’s revenue to decrease.

However, the Company currently believes any such reduction would not likely have a material impact on its results of operations in future periods.

The potential impacts described above represent the Company’s assessment at this time, and the Company will continue to evaluate the impact of the OBBBA on its business and operations as the legislation’s provisions continue to become effective through 2028.

RESULTS OF OPERATIONS (dollars in millions)

The following tables present the financial measures that management considers to be the most significant indicators of the Company ’ s performance.

Three Months Ended June 30,

Three Months Ended September 30,

2025 2024 Change

3 unchanged sentences

Total $ 3,563.5 $ 3,282.0 8.6 %

Dx revenues for the three months ended June 30, 2025 were $2,748.8, an increase of 8.9% over $2,524.9 in the second quarter of 2024.

The increase was due to organic revenue of 4.5% and acquisitions, net of divestitures, of 4.5%, partially offset by unfavorable foreign currency translation of 0.1%.

Dx revenues for the three months ended September 30, 2025, were $2,769.6, an increase of 8.5% over $2,553.5 in the third quarter of 2024.

The increase was primarily due to organic revenue of 6.3% and acquisitions, net of divestitures, of 2.2%.

Dx total volume, measured by requisitions, increased by 4.7% as organic volume increased by 3.5% and acquisition volume, net of divestitures, contributed 1.2%.

Price/mix increased by 4.0% due to acquisitions, net of divestitures, of 3.0% and organic growth of 1.1%, partially offset by unfavorable foreign currency translation of 0.1%.

BLS revenues for the three months ended June 30, 2025, were $784.8, an increase of 11.0% over $707.0 in the second quarter of 2024.

Price/mix increased by 3.7% primarily due to organic growth of 2.8% and acquisitions, net of divestitures, of 1.0%.

BLS revenues for the three months ended September 30, 2025, were $799.1, an increase of 8.3% over $737.7 in the third quarter of 2024.

The increase was due to organic growth of 5.3% and favorable foreign currency translation of 3.0%.

Cost of Revenues

Three Months Ended June 30,

Three Months Ended September 30,

2025 2024 Change

1 unchanged sentence

Cost of revenues as a % of revenues 71.2 % 72.4 %

Cost of revenues increased 8.1% during the three months ended June 30, 2025, as compared with the corresponding period in 2024.

Cost of revenues as a percentage of revenues during the three months ended June 30, 2025, decreased to 70.3% as compared to 71.2% in the corresponding period in 2024.

This decrease was primarily due to increased demand as the Company leveraged the growth of its revenues.

Cost of revenues increased 6.8% during the three months ended September 30, 2025, as compared with the corresponding period in 2024.

Cost of revenues as a percentage of revenues during the three months ended September 30, 2025, decreased to 71.2% as compared to 72.4% in the corresponding period in 2024.

This decrease was primarily due to operational efficiencies and the impact from revenue growth, including the performance of Invitae.

Selling, General, and Administrative Expenses

Three Months Ended June 30,

Three Months Ended September 30,

2025 2024 Change

2 unchanged sentences

15.5 % 17.3 %

Selling, general, and administrative expenses as a percentage of revenues were 16.4% and 17.3% during the three months ended June 30, 2025, and 2024, respectively.

The decrease was primarily due to increased demand as the Company leveraged the growth of its revenues and a decrease in costs related to the Spin-off of Fortrea, partially offset by higher personnel costs and the impact from Invitae.

Selling, general, and administrative expenses as a percentage of revenues were 15.5% and 17.3% during the three months ended September 30, 2025, and 2024, respectively.

The decrease was primarily due to the impact from revenue growth, including the performance of Invitae, and a decrease in costs related to the Spin-off of Fortrea.

Amortization of Intangibles and Other Assets

Three Months Ended June 30,

Three Months Ended September 30,

2025 2024 Change

Amortization of intangibles and other assets $ 69.5 $ 63.7 9.1 %

The increase in amortization of intangibles and other assets primarily reflects additional amortization for assets acquired subsequent to June 30, 2024.

The increase in amortization of intangibles and other assets primarily reflects additional amortization for assets acquired subsequent to September 30, 2024.

Goodwill and Other Asset Impairments

Three Months Ended September 30,

2025 2024 Change

Goodwill and other asset impairments $ 0.7 $ — 100.0 %

The impairment charges for the three months ended September 30, 2025, were due to the write-off of certain capitalized software costs.

Restructuring and Other Charges

Three Months Ended June 30,

Three Months Ended September 30,

2025 2024 Change

Restructuring and other charges $ 5.9 $ 18.0 (66.4) %

During the three months ended June 30, 2025, the Company recorded net restructuring and other charges of $4.1.

The charges were comprised of $15.1 in contract termination costs, $9.4 related to severance and other personnel costs, and $7.3 in facility-related costs.

The charges were adjusted by the reversal of a previously established liability of $26.4 in unused facility-related costs and $1.3 in unused severance-related costs.

During the three months ended June 30, 2024, the Company recorded net restructuring and other charges of $11.6.

The charges were comprised of $9.2 related to severance and other personnel costs and $2.7 in facility-related costs.

The charges were adjusted by the reversal of a previously established liability of $0.3 in unused facility-related costs.

During the three months ended September 30, 2025, the Company recorded net restructuring and other charges of $5.9.

The charges were comprised of $4.2 related to severance and other personnel costs, $1.8 in facility-related costs, and $0.2 in contract termination costs.

The charges were adjusted by the reversal of a previously established liability of $0.2 in unused severance and other personnel costs and $0.1 in unused facility-related costs.

During the three months ended September 30, 2024, the Company recorded net restructuring and other charges of $18.0.

The charges were comprised of $19.3 related to severance and other personnel costs.

The charges were adjusted by the reversal of a previously established liability of $1.2 in unused severance and other personnel costs and $0.1 in unused facility-related costs.

Interest Expense

Three Months Ended June 30,

Three Months Ended September 30,

2025 2024 Change

Interest expense $ 56.0 $ 50.4 10.9 %

For the three months ended June 30, 2025, interest expense increased 20.0% as compared with the corresponding period in 2024.

The increase was primarily due to a higher average amount of total debt outstanding during the three months ended June 30, 2025, when compared to the three months ended June 30, 2024.

For the three months ended September 30, 2025, interest expense increased 10.9% as compared with the corresponding period in 2024.

The increase was primarily due to higher weighted-average interest rates and an increase in the average amount of total debt outstanding during the three months ended September 30, 2025, when compared to the three months ended September 30, 2024.

Equity Method Loss, Net

Three Months Ended June 30,

Three Months Ended September 30,

2025 2024 Change

1 unchanged sentence

Equity method loss, net represents the Company’s ownership share in joint venture partnerships along with equity investments in other companies in the healthcare industry.

The increase in equity method loss for the three months ended June 30, 2025, as compared with the corresponding period in 2024, was due to incremental losses from investments.

Three Months Ended June 30,

The increase in Equity method loss, net for the three months ended September 30, 2025, as compared with the corresponding period in 2024, was primarily due to the loss recognized from the SYNLAB investment that closed in the first quarter of 2025.

Three Months Ended September 30,

2025 2024 Change

Other, net $ (1.9) $ 4.3 (143.8) %

The change in Other, net for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, is primarily due to investment losses of $31.3 recorded during the three months ended June 30, 2025, compared to investment losses of $1.5 for the corresponding period of 2024.

In addition, there was a $22.4 decrease of transition services fees charged to Fortrea for the three months ended June 30, 2025, as compared with the corresponding period in 2024, related to administrative and information technology systems support.

The costs to provide these transition services are included in operating income, but the service fees are included in other income.

The change in Other, net for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, is primarily due to the TSA expiration resulting in a $18.4 decrease of fees charged to Fortrea for the three months ended September 30, 2025, as compared with the corresponding period in 2024, related to administrative and information technology systems support.

The costs to provide these transition services are included in Operating income, but the service fees are included in Other, net.

In addition, there were investment gains of $2.3, recorded during the three months ended September 30, 2025, compared to investment losses of $1.6 for the corresponding period of 2024.

Foreign currency transaction losses of $4.9 were recognized for the three months ended September 30, 2025, as compared to losses of $10.0 for the corresponding period of 2024.

Provision for Income Taxes

Three Months Ended June 30,

Three Months Ended September 30,

2025 2024 Change

3 unchanged sentences

22.4 % 19.5 %

The decrease in the effective tax rate for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, was primarily attributable to incremental tax benefits on the vesting of employee stock plan awards and the recognition of previously reserved uncertain tax benefits.

The increase in the effective tax rate for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, was primarily attributable to the jurisdictional mix of earnings.

Operating Results by Segment

Three Months Ended June 30,

Three Months Ended September 30,

2025 2024 Change

6 unchanged sentences

Amortization of intangibles and other assets (69.5) (63.7) 9.1 %

Goodwill and other asset impairments (0.7) — (100.0) %

Restructuring and other charges

1 unchanged sentence

Total Operating income $ 396.6 $ 254.1 56.1 %

Dx operating income was $482.8 for the three months ended June 30, 2025, an increase of $41.3 over operating income of $441.5 in the corresponding period of 2024, and Dx operating margin increased 10 basis points year-over-year.

The increase in operating margin was primarily due to an increase in organic demand, partially offset by the impact of Invitae.

BLS operating income was $123.3 for the three months ended June 30, 2025, an increase of $15.9 over operating income of $107.4 in the corresponding period of 2024, and BLS operating margin increased 50 basis points year-over-year.

The increase was primarily due to an increase in organic demand and operating efficiencies.

Dx segment operating income was $450.4 for the three months ended September 30, 2025, an increase of $63.0 over operating income of $387.4 in the corresponding period of 2024, and Dx segment operating margin increased 110 basis points year-over-year.

The increase in operating income and operating margin was primarily due to organic demand, including the performance of Invitae, as well as slight favorability from weather during the three months ended September 30, 2025, as compared to the corresponding period of 2024.

BLS segment operating income was $132.2 for the three months ended September 30, 2025, an increase of $11.3 over operating income of $120.9 in the corresponding period of 2024, and BLS segment operating margin increased 20 basis points year-over-year.

The increase in operating income was primarily due to an increase in organic demand.

General corporate and unallocated expenses are comprised primarily of administrative services such as executive management, human resources, legal, finance, corporate affairs, and information technology.

General corporate and unallocated expenses were $139.2 for the three months ended June 30, 2025, a decrease of $41.1 compared to corporate expenses of $180.3 in the corresponding period of 2024, primarily due to costs related to the Spin-off of Fortrea that were incurred during the three months ended June 30, 2024, but did not reoccur in the corresponding period of 2025.

Six Months Ended June 30,

General corporate and unallocated expenses were $109.9 for the three months ended September 30, 2025, a decrease of $62.6 compared to corporate expenses of $172.5 in the corresponding period of 2024, primarily due to decreases in acquisition-related costs and costs related to the Spin-off of Fortrea.

Nine Months Ended September 30,

2025 2024 Change

3 unchanged sentences

Total $ 10,435.9 $ 9,679.5 7.8 %

Dx revenues for the six months ended June 30, 2025, were $5,378.4, an increase of 7.5% over $5,004.6 during the six months ended June 30, 2024.

The increase was due to acquisitions, net of divestitures, of 4.7% and organic revenue of 3.0%, partially offset by unfavorable foreign currency translation of 0.2%.

Dx revenues for the nine months ended September 30, 2025, were $8,148.0, an increase of 7.8% over $7,558.1 during the nine months ended September 30, 2024.

The increase was due to organic revenue of 4.1% and acquisitions, net of divestitures, of 3.8%, partially offset by unfavorable foreign currency translation of 0.1%.

Dx total volume, measured by requisitions, increased by 4.2% as organic volume increased by 2.6% and acquisition volume, net of divestitures, contributed 1.6%.

Price/mix increased by 3.6% due to acquisitions, net of divestitures, of 2.2% and organic growth of 1.5%, partially offset by unfavorable foreign currency translation of 0.1%.

BLS revenues for the six months ended June 30, 2025, were $1,506.1, an increase of 6.2% over $1,417.9 during the six months ended June 30, 2024.

BLS revenues for the nine months ended September 30, 2025, were $2,305.2, an increase of 6.9% over $2,155.6 during the nine months ended September 30, 2024.

The increase was due to organic growth of 5.2% and favorable foreign currency translation of 1.7%.

Cost of Revenues

Six Months Ended June 30,

Nine Months Ended September 30,

2025 2024 Change

1 unchanged sentence

Cost of revenues as a % of revenues 71.1 % 71.8 %

Cost of revenues increased 6.7% during the six months ended June 30, 2025, as compared with the corresponding period in 2024.

Cost of revenues as a percentage of revenues during the six months ended June 30, 2025, decreased to 71.0% as compared to 71.5% in the corresponding period in 2024.

This decrease was primarily due to increased demand as the Company leveraged the growth of its revenues.

Cost of revenues increased 6.7% during the nine months ended September 30, 2025, as compared with the corresponding period in 2024.

Cost of revenues as a percentage of revenues during the nine months ended September 30, 2025, decreased to 71.1% as compared to 71.8% in the corresponding period in 2024.

This decrease was primarily due to growth in demand as the Company leveraged the growth of its revenues and operational efficiencies, including the performance of Invitae.

Selling, General, and Administrative Expenses

Six Months Ended June 30,

Nine Months Ended September 30,

2025 2024 Change

2 unchanged sentences

16.1 % 16.9 %

Selling, general, and administrative expenses as a percentage of revenues were 16.4% and 16.7% during the six months ended June 30, 2025, and 2024, respectively.

Selling, general, and administrative expenses as a percentage of revenues were 16.1% and 16.9% during the nine months ended September 30, 2025, and 2024, respectively.

The decrease was primarily due to growth in demand as the Company leveraged the growth of its revenues and a decrease in costs related to the Spin-off of Fortrea, partially offset by higher personnel costs and the impact from Invitae.

Amortization of Intangibles and Other Assets

Six Months Ended June 30,

Nine Months Ended September 30,

2025 2024 Change

Amortization of intangibles and other assets $ 207.4 $ 186.0 11.5 %

The increase in amortization of intangibles and other assets primarily reflects additional amortization for assets acquired subsequent to June 30, 2024.

The increase in amortization of intangibles and other assets primarily reflects additional amortization for assets acquired subsequent to September 30, 2024.

Goodwill and Other Asset Impairments

Six Months Ended June 30,

Nine Months Ended September 30,

2025 2024 Change

Goodwill and other asset impairments $ 0.7 $ 2.5 (71.7) %

The impairment charges for the six months ended June 30, 2024, were primarily due to the decommissioning of a robotic asset.

The impairment charges for the nine months ended September 30, 2025, were due to the write-off of certain capitalized software costs.

The impairment charges for the nine months ended September 30, 2024, were primarily due to the decommissioning of a robotic asset.

Restructuring and Other Charges

Six Months Ended June 30,

Nine Months Ended September 30,

2025 2024 Change

Restructuring and other charges $ 16.4 $ 34.6 (52.6)%

During the six months ended June 30, 2025, the Company recorded net restructuring and other charges of $10.5.

During the nine months ended September 30, 2025, the Company recorded net restructuring and other charges of $16.4.

The charges were comprised of $21.2 related to severance and other personnel costs, $15.3 in contract termination costs, and $9.1 in facility-related costs.

The charges were adjusted by the reversal of a previously established liability of $27.5 in unused facility-related costs and $1.4 in unused severance-related costs.

During the six months ended June 30, 2024, the Company recorded net restructuring and other charges of $16.6.

The charges were adjusted by the reversal of a previously established liability of $27.6 in unused facility-related costs and $1.6 in unused severance and other personnel costs.

During the nine months ended September 30, 2024, the Company recorded net restructuring and other charges of $34.6.

The charges were comprised of $34.4 related to severance and other personnel costs and $1.8 in facility-related costs.

The charges were adjusted by the reversal of a previously established liability of $0.3 in unused facility-related costs.

The charges were adjusted by the reversal of a previously established liability of $1.2 in unused severance and other personnel costs and $0.4 in unused facility-related costs.

Interest Expense

Six Months Ended June 30,

Nine Months Ended September 30,

2025 2024 Change

Interest expense $ 169.1 $ 144.9 16.7 %

For the six months ended June 30, 2025, interest expense increased 19.8% as compared with the corresponding period in 2024.

The increase was primarily due to a higher average amount of total debt outstanding during the six months ended June 30, 2025, when compared to the six months ended June 30, 2024.

For the nine months ended September 30, 2025, interest expense increased 16.7% as compared with the corresponding period in 2024.

The increase was primarily due to higher weighted-average interest rates and an increase in the average amount of total debt outstanding during the nine months ended September 30, 2025, when compared to the nine months ended September 30, 2024.

Equity Method Loss, Net

Six Months Ended June 30,

Nine Months Ended September 30,

2025 2024 Change

1 unchanged sentence

Equity method loss, net represents the Company’s ownership share in joint venture partnerships along with equity investments in other companies in the health care industry.

The increase in equity method loss for the six months ended June 30, 2025, as compared with the corresponding period in 2024, was due to incremental losses from investments.

Six Months Ended June 30,

The increase in Equity method loss, net for the nine months ended September 30, 2025, as compared with the corresponding period in 2024, was primarily due to the loss recognized from the SYNLAB investment that closed in the first quarter of 2025.

Nine Months Ended September 30,

2025 2024 Change

Other, net $ (35.6) $ 43.8 (181.2) %

The change in Other, net for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, is primarily due to a $41.5 decrease of transition services fees charged to Fortrea for the six months ended June 30, 2025, as compared with the corresponding period in 2024, related to administrative and information technology systems support.

The costs to provide these transition services are included in operating income, but the service fees are included in other income.

In addition, investment losses of $34.7 were recorded during the six months ended June 30, 2025, compared to investment losses of $5.7 for the corresponding period of 2024.

The change in Other, net for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, is primarily due to the TSA expiration resulting in a $59.9 decrease of fees charged to Fortrea for the nine months ended September 30, 2025, as compared with the corresponding period in 2024, related to administrative and information technology systems support.

The costs to provide these transition services are included in Operating income, but the service fees are included in Other, net.

In addition, there were investment losses of $32.4, recorded during the nine months ended September 30, 2025, compared to investment losses of $7.3 for the corresponding period of 2024.

Provision for Income Taxes

Six Months Ended June 30,

Nine Months Ended September 30,

2025 2024 Change

3 unchanged sentences

22.3 % 22.2 %

The decrease in the effective tax rate for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily attributable to incremental tax benefits on the vesting of employee stock plan awards.

The increase in the effective tax rate for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, was primarily attributable to the jurisdictional mix of earnings.

Operating Income by Segment

Six Months Ended June 30,

Nine Months Ended September 30,

2025 2024 Change

9 unchanged sentences

Operating income $ 1,117.1 $ 870.2 28.4 %

Dx operating income was $910.3 for the six months ended June 30, 2025, an increase of $50.9 over operating income of $859.4 in the corresponding period of 2024, and Dx operating margin decreased 30 basis points year-over-year.

The decrease in operating margin was primarily due to the impact from Invitae, partially offset by increased organic demand.

BLS operating income was $230.2 for the six months ended June 30, 2025, an increase of $22.9 over operating income of $207.3 in the corresponding period of 2024, and BLS operating margin increased 70 basis points year-over-year.

The increase was primarily due to organic demand and operating efficiencies.

Dx segment operating income was $1,360.7 for the nine months ended September 30, 2025, an increase of $113.9 over operating income of $1,246.8 in the corresponding period of 2024, and Dx segment operating margin increased 20 basis points year-over-year.

The increase in operating margin was primarily due to increased demand.

BLS segment operating income was $362.4 for the nine months ended September 30, 2025, an increase of $34.2 over operating income of $328.2 in the corresponding period of 2024, and BLS segment operating margin increased 50 basis points year-over-year.

The increase in operating margin was primarily due to increased organic demand and operating efficiencies, partially offset by higher personnel costs.

General corporate expenses are comprised primarily of administrative services such as executive management, human resources, legal, finance, corporate affairs, and information technology.

Corporate expenses were $271.6 for the six months ended June 30, 2025, a decrease of $37.6 over corporate expenses of $309.2 in the corresponding period of 2024, primarily due to costs related to the Spin-off of Fortrea that were incurred during the six months ended June 30, 2024, but did not reoccur in the corresponding period of 2025.

Corporate expenses were $381.5 for the nine months ended September 30, 2025, a decrease of $100.2 over corporate expenses of $481.7 in the corresponding period of 2024, primarily due to decreases in costs related to the Spin-off of Fortrea and acquisition-related costs.

LIQUIDITY AND CAPITAL RESOURCES (dollars in millions, except per share data)

3 unchanged sentences

The Company’s cash flows were as follows:

Six Months Ended June 30,

Nine Months Ended September 30,

Net cash provided by operating activities $ 1,026.3 $ 808.6

Net cash used for investing activities (804.1) (1,157.2)

Net cash used for financing activities (1,107.1) (221.7)

Net cash (used for) provided by financing activities (1,166.6) 1,326.6

Effect of exchange rate changes on Cash and cash equivalents 23.8 2.5

Net decrease in Cash and cash equivalents

$ (871.4) $ (271.7)

Net (decrease) increase in Cash and cash equivalents $ (920.6) $ 980.5

Cash and Cash Equivalents

Cash and cash equivalents at June 30, 2025, and 2024, totaled $647.3 and $265.1, respectively.

Cash and cash equivalents at September 30, 2025, and 2024, totaled $598.1 and $1,517.3, respectively.

Cash and cash equivalents consist of highly liquid instruments, such as time deposits, and other money market investments, which have original maturities of three months or less.

Cash Flows from Operating Activities

During the six months ended June 30, 2025, the Company’s operations provided $639.1 of cash as compared to $531.3 of cash provided during the same period in 2024.

During the nine months ended September 30, 2025, the Company’s operations provided $1,026.3 of cash as compared to $808.6 during the same period in 2024.

The $217.7 increase in cash provided by operations in 2025 as compared with the corresponding 2024 period was primarily due to higher earnings.

Cash Flows from Investing Activities

Net cash used for investing activities for the six months ended June 30, 2025, was $430.1 as compared to $578.1 for the six months ended June 30, 2024.

The decrease in cash used for investing activities for the six months ended June 30, 2025, as compared to the corresponding period in 2024, was primarily due to a decrease in business acquisitions and lower capital expenditures, partially offset by an equity method investment in SYNLAB during the six months ended June 30, 2025.

Capital expenditures were $203.9 and $262.0 for the six months ended June 30, 2025, and 2024, respectively.

Capital expenditures for the six months ended June 30, 2025, were 3.0% of revenues, primarily in connection with projects to support growth in the Company’s core businesses, facility expansion and updates, and further acquisition integration activities.

Net cash used for investing activities for the nine months ended September 30, 2025, was $804.1 as compared to $1,157.2 for the nine months ended September 30, 2024.

The decrease in cash used for investing activities for the nine months ended September 30, 2025, as compared to the corresponding period in 2024, was primarily due to a decrease in business acquisitions and lower capital expenditures, partially offset by the investment in SYNLAB during the nine months ended September 30, 2025.

Capital expenditures were $310.6 and $377.8 for the nine months ended September 30, 2025, and 2024, respectively.

Capital expenditures for the nine months ended September 30, 2025, were 3.0% of revenues, primarily in connection with projects to support growth in the Company’s core businesses, facility expansion and updates, and further acquisition integration activities.

Cash Flows from Financing Activities

Net cash used for financing activities for the six months ended June 30, 2025, was $1,107.1 as compared to $221.7 for the six months ended June 30, 2024.

The change in cash flows from financing activities for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily due to the Company’s $1,000.0 payment of the 3.60% senior notes due February 2025 and a $100.0 increase in common stock repurchases, partially offset by proceeds of $225.0 from the Company’s accounts receivable securitization facility.

In addition to Cash and cash equivalents, at June 30, 2025, the Company had $1,000.0 of available borrowings under its revolving credit facility, which, as amended on June 27, 2025, does not expire until 2030.

Net cash used for financing activities for the nine months ended September 30, 2025, was $1,166.6 as compared to net cash provided by financing activities of $1,326.6 for the nine months ended September 30, 2024.

The change in cash flows from financing activities for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, was primarily due to a decrease of proceeds from senior note offerings of $2,000.0, an increase in senior note payments of $400.0, a decrease of proceeds from the Company’s accounts receivable securitization facility of $75.0, and an increase in common stock repurchases of $50.0.

In addition to Cash and cash equivalents, at September 30, 2025, the Company had $1,000.0 of available borrowings under its revolving credit facility, which, as amended on June 27, 2025, expires in 2030.

Under the Company’s credit facilities and indentures relating to the Company’s senior notes, the Company is subject to negative covenants limiting subsidiary indebtedness and certain other covenants typical for investment grade-rated borrowers, and with respect to the credit facilities, the Company is required to maintain certain leverage ratios.

The Company was in compliance with all covenants under the credit facilities and the indentures related to the Company’s outstanding senior notes as of June 30, 2025.

The Company was in compliance with all covenants under the credit facilities and the indentures related to the Company’s outstanding senior notes as of September 30, 2025.

The Company expects that it will remain in compliance with all covenants associated with its existing debt obligations for the next 12 months.

At June 30, 2025, the Company had outstanding authorization from its board of directors (Board) to purchase up to $1,080.4 maximum value of Company common stock, par value $0.10 per share (Common Stock).

At September 30, 2025, the Company had outstanding authorization from its board of directors (Board) to purchase up to $1,055.4 maximum value of Company common stock, par value $0.10 per share (Common Stock).

The repurchase authorization has no expiration date.

For the six months ended June 30, 2025, the Company paid $121.5 in Common Stock dividends.

On July 10, 2025, the Company announced a cash dividend of $0.72 per share of Common Stock, or approximately $60.6 in the aggregate.

The dividend will be payable on September 11, 2025, to stockholders of record of all issued and outstanding shares of Common

Stock at the close of business on August 28, 2025.

For the nine months ended September 30, 2025, the Company paid $181.4 in Common Stock dividends.

On October 8, 2025, the Company announced a cash dividend of $0.72 per share of Common Stock, or approximately $60.6 in the aggregate.

The dividend will be payable on December 11, 2025, to stockholders of record of all issued and outstanding shares of Common Stock at the close of business on November 26, 2025.

The declaration and payment of any future dividends will be at the discretion of the Board.

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Also, the Indentures permit the Company to satisfy LCAH’s reporting obligations so long as the Labcorp Holdings Guarantees remain in place and the Company’s Condensed Consolidated Financial Statements and other information comply with the requirements of Rule 3-10 of Regulation S-X.

At June 30, 2025, there was $3,092.7 and $2,000.0 aggregate principal amount of issued and outstanding senior notes of LCAH, issued under the 2010 Indenture and the 2024 Indenture, respectively, that are fully and unconditionally guaranteed by the Company.

At September 30, 2025, there was $3,096.6 and $2,000.0 aggregate principal amount of issued and outstanding senior notes of LCAH, issued under the 2010 Indenture and the 2024 Indenture, respectively, that are fully and unconditionally guaranteed by the Company.

Accordingly, pursuant to Rule 3-10 of Regulation S-X, separate consolidated financial statements of LCAH have not been presented.

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The Company has outstanding debt instruments.

At June 30, 2025, the Company had total future payments of $5,618.2, with $500.4 of payments due within 12 months.

At September 30, 2025, the Company had total future payments of $5,622.0, with $500.4 of payments due within 12 months, which the Company anticipates refinancing in future periods.

The Company has leases for patient service centers, laboratories and testing facilities, clinical facilities, general office spaces, vehicles, and office and laboratory equipment.

At June 30, 2025, the Company had total future payments for short-term and long-term leases of $1,166.0, with payments of $225.9 due within 12 months.

In connection with the pending acquisitions of select assets of the laboratory business of BioReference Health and select assets of the outreach business from Community Health Systems, Inc., the Company expects to pay up to $420.0, which includes $32.5 of consideration contingent on performance.

The Company expects both transactions to close in 2025, subject to customary closing conditions and applicable regulatory approvals.

At September 30, 2025, the Company had total future payments for short-term and long-term leases of $1,159.5, with payments of $230.3 due within 12 months.

In connection with the pending acquisitions of select assets of the outreach business from Community Health Systems, Inc.

(CHS) and select clinical laboratory assets from Empire City Laboratories, Inc.

(Empire City), the Company expects to pay up to $445.0, which includes $85.0 of consideration contingent on performance.

Subject to customary closing conditions and applicable regulatory approvals, the Company expects the acquisitions of select assets from CHS and Empire City to close in

the fourth quarter of 2025 and the first quarter of 2026, respectively.

See Note 3 Business Acquisitions and Dispositions to the Company’s Condensed Consolidated Financial Statements for additional information.

At June 30, 2025, the Company had provided letters of credit aggregating approximately $103.3, primarily in connection with certain insurance programs which are renewed annually.

At September 30, 2025, the Company had provided letters of credit aggregating approximately $103.3, primarily in connection with certain insurance programs which are renewed annually.

Based on current and projected levels of cash flows from operations, coupled with availability under its revolving credit facility, the Company believes it has sufficient liquidity to meet both its anticipated short-term and long-term cash needs for the next 12 months and the reasonably foreseeable future;

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There have been no material changes to the critical accounting estimates that appear in Part II - Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

The impact of recent accounting pronouncements, if any, is discussed in Note 1 Basis of Financial Statement Presentation to the Condensed Consolidated Financial Statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis