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Labcorp reported Q3 FY2026 revenue of $3.8 billion, up from $3.6 billion a year earlier. Revenue exceeded the consensus by 1.13%, although both the reported figure and estimate round to $3.8 billion. Adjusted earnings per share of $4.78 also exceeded the consensus estimate of $4.65.
The company’s filing attributed revenue growth primarily to organic growth and acquisitions, partly offset by currency translation. Diagnostics revenue was $3.0 billion, and the filing said higher testing volume and price mix contributed to its growth. Biopharma Laboratory Services revenue was $866.7 million, with organic growth partly offset by strategic actions in early development and currency effects.
Labcorp’s gross margin rose to 29.1% from 28.8%, while its operating margin fell to 10.6% from 11.1%. The filing attributed the lower cost of revenue as a share of sales to organic growth and operating efficiencies, but said personnel and LaunchPad costs increased selling, general and administrative expenses as a share of revenue. Free cash flow was $402.5 million, compared with $278.1 million a year earlier.
| Q3 FY2026 | Q3 FY2025 | Change | |
|---|---|---|---|
| Revenue | $3.8 billion | $3.6 billion | 6.92% |
| Diluted EPS | $3.22 | $3.12 | 3.34% |
| Gross margin | 29.1% | 28.8% | 0.3 percentage points |
| Operating margin | 10.6% | 11.1% | −0.6 percentage points |
| Free cash flow | $402.5 million | $278.1 million | 44.7% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $4.78 | $4.65 | Beat by 2.80% |
| Revenue | $3.8 billion | $3.8 billion | Beat by 1.13% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
CEO Adam Schechter said diagnostic growth came from both testing volume and price mix, with the latter driven by more tests per accession. Asked about the balance between them, he said it could fluctuate from quarter to quarter, but Labcorp expects both to grow over time.
In biopharma services, Schechter said central laboratory growth reflected underlying demand as well as favorable timing of study starts. He told analysts that bookings were supported by large pharmaceutical customers and that the company was seeing more opportunities in cardiovascular trials. CFO Julia Wang said the segment ended the quarter with an $8.9 billion backlog, part of which Labcorp expects to convert into revenue over the following year.
Wang attributed adjusted operating margin expansion to organic growth and operating efficiencies. Asked about future margins, she pointed to LaunchPad productivity initiatives and changes in early development; Schechter said the timing of acquisitions would affect when margins improve.
Schechter said Labcorp acquired MLM Medical Labs during the quarter to expand its central laboratory capabilities. He also described agreements signed after quarter-end for BioReference laboratory assets, Myriad Genetics’ prenatal testing business and Millennium Health. Asked about competition, he said the Myriad business would add tests to Labcorp’s women’s health portfolio, while Millennium would expand its geographic presence. He said the deals’ timing depends on approvals and closing conditions.
On proposed PAMA reimbursement changes, Schechter said the payment cuts would “threaten patient access to laboratory services.” He told analysts Labcorp would use its diagnostics and biopharma businesses, LaunchPad and business development to offset part of the impact. Wang said ACA-related effects reduced diagnostic volume in the quarter and that she expected a similar effect in the next quarter. Schechter also cautioned that biopharma bookings “quarter over quarter does vary quite a bit.”
Guidance
Labcorp raised the midpoint of its FY2026 enterprise revenue growth outlook and now expects growth of 5.90% to 6.70%, compared with its prior range of 5.40% to 6.30%. Wang said the company also raised its segment growth outlooks to 5.50%–6.20% for diagnostics and 7.40%–8.40% for Biopharma Laboratory Services. Labcorp raised the midpoint of its adjusted earnings per share guidance, with a new range of $18.30 to $18.70.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Bookings, Biopharma Laboratory Services | Q4 FY2026 | Labcorp expects continued strength in biopharma bookings in Q4 FY2026. | — | — |
| Units, Diagnostics | FY2026 | Labcorp expects diagnostic volume growth to slightly outpace price mix growth in FY2026. | — | — |
| Capex growth, Percent of Revenue | FY2026 | 4.00% | — | New |
| Free cash flow | FY2026 | $1.2 billion–$1.4 billion | $1.2 billion–$1.4 billion | Held |
| EPS, non-GAAP | FY2026 | $18.30–$18.70 | $18.10–$18.55 | Raised |
| Operating margin, non-GAAP | FY2026 | Labcorp expects enterprise operating margin expansion in FY2026. | — | — |
| Revenue, Central Laboratories Organic Constant Currency | FY2026 | Labcorp expects central laboratory revenue to grow in the high single digits on an organic constant-currency basis in FY2026. | — | — |
| Revenue growth, Biopharma Laboratory Services | FY2026 | 7.40%–8.40% | 3.80%–5.40% | Raised |
| Revenue growth, Diagnostics | FY2026 | 5.50%–6.20% | 5.10%–5.90% | Raised |
| Revenue growth | FY2026 | 5.90%–6.70% | 5.00%–6.10% | Raised |
| Tax rate, non-GAAP | FY2026 | 23.0% | — | New |
| Revenue growth, Enterprise | FY2026 | 5.40%–6.30% | — | New |
| Revenue, Biopharma Laboratory Services | Next 12 months | $2.7 billion | — | New |
| Bookings, Biopharma Laboratory Services | FY2026 | 1.0× | — | — |
| Tax rate | FY2026 | 23.0% | — | New |
| Capex growth, Central Labs | FY2026 | 4.00% | — | New |
| EPS | FY2026 | $17.70–$18.35 | — | New |