Labcorp Holdings Inc. (LH) Business Profile

What it does

Labcorp Holdings provides laboratory testing and related services to doctors, hospitals, patients, health plans and drug developers. It was founded in 1978 and is headquartered in Burlington. Adam Schechter is chairman and chief executive officer.

The diagnostics business tests patient samples to help providers diagnose conditions, monitor health and make treatment decisions. Its services range from commonly ordered blood and urine tests to specialty tests using genetic and other technologies. Labcorp collects samples through patient service centers and staff placed in customer offices, then processes them through its laboratory network. Patients can also buy certain tests directly through Labcorp OnDemand.

The Biopharma Laboratory Services business helps pharmaceutical, biotechnology and diagnostics companies develop products. Its early development laboratories conduct analytical and safety testing, while its central laboratories process samples and provide data for clinical trials. The business also offers sample logistics, storage and digital tools for trial sponsors and investigators.

Labcorp’s two businesses can serve customers across the path from developing a treatment to testing patients. For example, it develops companion diagnostics: tests used to help guide treatment decisions. Its diagnostic and biopharma sales teams also cross-promote services, including opportunities for healthcare providers to participate in clinical trials.

How it makes money

Labcorp earns revenue by performing diagnostic tests and providing laboratory services for drug development. In FY2025, total revenue was $13,951.7 million; in the third quarter of 2026, it was $3.8 billion.

Diagnostics generated $10.9 billion in FY2025, or 77.8% of revenue. It sells routine tests used in patient care as well as specialty testing in areas such as oncology, genetics and infectious disease. It also performs employment, wellness, toxicology and other testing. The business receives requests from healthcare providers and collects specimens through its own sites and staff located in customer facilities.

Clinical laboratories bill the responsible payer for tests and related services. Third-party payments come mainly from managed care organizations, mostly on a fee-for-service basis. A smaller portion is paid under negotiated per-member arrangements or from a capitation pool. Government fee schedules establish payments for traditional Medicare and Medicaid services. Clients pay for tests they order, while patients pay uncovered amounts or buy tests directly through Labcorp OnDemand.

Biopharma Laboratory Services generated $3.1 billion in FY2025, or 22.2% of revenue. Its early development work includes safety assessment and analytical services; its central laboratories provide testing, data and sample management for clinical trials. Drug-development service providers typically derive most revenue from pharmaceutical and biotechnology research and development spending, as well as marketing expenditures.

Testing generates repeat business as providers order tests for patient care, while biopharma work is tied to customers’ development projects and trials. Labcorp reported a Biopharma Laboratory Services backlog of $8.9 billion at the end of the third quarter of 2026 and expected approximately $2.8 billion to convert into revenue over the next 12 months.

Customers and how it sells

Physicians and other authorized healthcare providers are a primary source of diagnostic testing requests. They work in hospitals, health systems, medical practices and community clinics. Other customers and payers include managed care organizations, employers, government programs and patients. Patients can arrange testing and access results through digital applications, while Labcorp OnDemand lets consumers purchase tests directly.

Labcorp serves hundreds of pharmaceutical, biotechnology, medical device and diagnostics companies, as well as contract research organizations. These customers range from multinational businesses to smaller and emerging companies. Labcorp’s central laboratory services support clinical trials, while its early development laboratories serve customers conducting preclinical research.

Nearly all diagnostics revenue was generated in the U.S. in 2025. Biopharma Laboratory Services is more international: approximately 41% of its revenue came from the U.S. and 59% from other countries in 2025. The central laboratory business supported clinical trial activity in approximately 100 countries.

In diagnostics, access points included more than 2,200 patient service centers and more than 7,000 in-office phlebotomists during 2025. Labcorp’s laboratory network and sample logistics connect those collection points with testing operations. In the third quarter of 2026, it acquired MLM Medical Labs, expanding its global central laboratory capabilities.

Suppliers and costs

Labcorp operates laboratories and specimen-collection sites rather than selling a manufactured product. Its diagnostics supply chain transfers patient samples through the testing process, and its central laboratory business manages transportation, tracking, storage and shipment of clinical-trial specimens. The central laboratory business also produces sample collection kits for trials.

Personnel, facilities, information technology and logistics support these operations. Labcorp had nearly 71,000 employees during 2025 and also used contingent workers. Its corporate expenses include executive management, human resources, legal, finance, corporate affairs and information technology.

Cost of revenues was 71.2% of revenue in 2025, down from 2024. Labcorp attributed the decrease to operational efficiencies and the impact of revenue growth. Selling, general and administrative expenses were 15.9% of revenue in 2025, down from 2024; higher personnel costs partly offset the benefit of revenue growth and lower costs related to the spin-off.

Capital expenditures totaled $434.5 million in 2025. Labcorp expects spending to support its core businesses, facility expansion and upgrades, productivity initiatives and acquisition integration.

Competitive position

Labcorp competes in clinical testing with hospital laboratories, physician-office laboratories and independent clinical and pathology laboratories. Some health-system laboratories have expanded their services, competing for testing ordered both inside and outside their systems. In drug development, Labcorp competes with small providers, larger companies with global operations, customers’ in-house departments and, to a lesser extent, academic research centers and teaching hospitals. No named competitor is identified in the supplied company material.

Labcorp says diagnostic laboratory selection depends on factors including test range, payer contracts, quality and timing of results, patient access, connectivity and price. Its network includes collection sites, laboratories, specimen logistics and electronic interfaces. Our reading: the network and established provider connections are a meaningful competitive advantage because they combine access, sample handling and result delivery, although other laboratory types compete for the same testing.

The company also offers routine and specialty tests and develops tests used alongside therapies. Our reading: the breadth of its test menu and connections between diagnostics and drug development provide another source of differentiation, but the evidence does not establish that those capabilities prevent customers from using other providers.

In biopharma, customers consider scientific expertise, regulatory compliance, geography, facilities, technology, price and service range. Our reading: Labcorp’s international central laboratory network supports its ability to compete for multinational trials, while in-house teams and other providers limit the protection that scale alone provides.

Growth opportunities

Labcorp is pursuing growth through health-system and local laboratory partnerships, specialty testing, acquisitions and international expansion. It signed or completed 13 collaboration transactions with health systems and local and regional laboratories during 2025. The company expects hospitals and other laboratories to seek partners with broad testing capabilities while focusing their own investment on patient care.

Its specialty priorities include oncology, women’s health, autoimmune disease and neurology. Labcorp launched more than 130 new tests in 2025 and is developing companion diagnostics that connect testing with drug development and treatment selection. It also sells tests directly to consumers and has introduced self-collection options.

Labcorp estimates that the U.S. clinical laboratory testing industry generated more than $80 billion in revenue in 2025 and that the global pharmaceutical industry spent more than $200 billion on research and development that year. The company also sees an opportunity to expand specialty diagnostics internationally.

In the third quarter of 2026, Labcorp acquired MLM Medical Labs to expand its central laboratory capabilities. After the quarter, it signed agreements to acquire selected BioReference laboratory assets, Myriad Genetics’ prenatal testing business and Millennium Health. The transactions remain subject to regulatory approvals and customary closing conditions.

For full-year 2026, Labcorp expects enterprise revenue growth of 5.9% to 6.7%. It expects diagnostics revenue growth of 5.5% to 6.2% and Biopharma Laboratory Services growth of 7.4% to 8.4%.

Structural risks

• Reimbursement and utilization: Government and commercial payers apply measures to control healthcare costs and test use. Labcorp expects reimbursement pressure to continue. Based on the preliminary fee schedule, it estimates a PAMA impact of approximately $125 million in 2027 and expects to offset a portion of it.

• Coverage and demand: Changes to Medicaid and the Affordable Care Act could reduce insurance coverage and diagnostic testing utilization. In the third quarter of 2026, Labcorp said ACA-related effects reduced diagnostic volume by about 30 basis points.

• Regulation and quality: Laboratories face certification, inspection and other requirements across jurisdictions. Noncompliance can lead to fines, loss of reimbursement approval, suspension of operations or other penalties. Errors in clinical trials can also undermine study data or delay a drug’s entry to market.

• Project and contract exposure: Labcorp bears financial risk when contracts are underpriced, incur cost overruns, are delayed, terminated or reduced in scope. Results can vary with the timing and progress of large projects.

• Acquisitions: Transactions can be delayed by regulatory clearance or disrupted by integration difficulties, loss of customers or employees, unanticipated costs and liabilities. The company’s pending acquisitions are subject to approvals and closing conditions.

• Privacy and cybersecurity: Failure to secure customer information or meet security requirements could lead to additional costs, litigation, enforcement actions and reputational damage. Health-information rules also impose requirements on how protected information is used and safeguarded.

Bottom line

Our reading

Our reading: Labcorp combines a repeat-use diagnostic testing network with a drug-development laboratory business tied to customers’ research programs; the latter adds international reach alongside a predominantly U.S. diagnostics operation (item1). Its collection network, test menu and trial capabilities support the business, but reimbursement pressure, project timing and acquisition integration remain material exposures (item1; item1a; call_prepared).