dgx-20260331


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-12215

Quest Diagnostics Incorporated


Delaware			16-1387862
(State of Incorporation)			(I.R.S. Employer Identification Number)
500 Plaza Drive
Secaucus,	NJ	07094
(973)	520-2700

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value	DGX	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 15, 2026, there were outstanding 110,696,429 shares of the registrant’s common stock, $.01 par value.

Table of Contents

PART I - FINANCIAL INFORMATION


		Page
Item 1. Financial Statements (unaudited)

	Index to unaudited consolidated financial statements filed as part of this report:

	Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025	2

	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2026 and 2025	3

	Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025	4

	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025	5

	Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2026 and 2025	6

	Notes to Consolidated Financial Statements (unaudited)	7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3. Quantitative and Qualitative Disclosures About Market Risk

	See Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”	33

Item 4. Controls and Procedures

	Controls and Procedures	33

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QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(unaudited)

(in millions, except per share data)


	Three Months Ended March 31,
	2026		2025
Net revenues	$	2,895	$	2,652

Operating costs and expenses and other operating income:
Cost of services	1,953		1,789
Selling, general and administrative	504		476
Amortization of intangible assets	37		39

Other operating expense, net	2		2
Total operating costs and expenses, net	2,496		2,306

Operating income	399		346

Other income (expense):
Interest expense, net	(63)		(67)
Other expense, net	(2)		(3)
Total non-operating expense, net	(65)		(70)

Income before income taxes and equity in earnings of equity method investees	334		276
Income tax expense	(74)		(59)
Equity in earnings of equity method investees, net of taxes	4		18


Net income	264		235
Less: Net income attributable to noncontrolling interests	12		15
Net income attributable to Quest Diagnostics	$	252	$	220






Earnings per share attributable to Quest Diagnostics’ common stockholders:


Basic	$	2.27	$	1.97




Diluted	$	2.24	$	1.94

Weighted average common shares outstanding:
Basic	110		111

Diluted	112		113

The accompanying notes are an integral part of these statements.

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QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(unaudited)

(in millions)


	Three Months Ended March 31,
	2026		2025
Net income	$	264	$	235

Other comprehensive income (loss):
Foreign currency translation adjustment	(16)		5



Other comprehensive (loss) income	(16)		5

Comprehensive income	248		240
Less: Comprehensive income attributable to noncontrolling interests	12		15
Comprehensive income attributable to Quest Diagnostics	$	236	$	225

The accompanying notes are an integral part of these statements.

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QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2026 AND DECEMBER 31, 2025

(unaudited)

(in millions, except per share data)


	March 31, 2026		December 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	393	$	420
Accounts receivable, net of allowance for credit losses of $27 and $25 as of March 31, 2026 and December 31, 2025, respectively	1,587		1,408
Inventories	225		189
Prepaid expenses and other current assets	361		361

Total current assets	2,566		2,378
Property, plant and equipment, net	2,189		2,203
Operating lease right-of-use assets	691		657
Goodwill	9,120		8,945
Intangible assets, net	1,717		1,636
Investments in equity method investees	134		136
Other assets	256		270

Total assets	$	16,673	$	16,225

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	1,500	$	1,600
Current portion of long-term debt	503		504
Current portion of long-term operating lease liabilities	174		174

Total current liabilities	2,177		2,278
Long-term debt	5,155		5,167
Long-term operating lease liabilities	574		537
Other liabilities	1,022		957

Commitments and contingencies
Redeemable noncontrolling interest	79		80
Stockholders’ equity:
Quest Diagnostics stockholders’ equity:
Common stock, par value $0.01 per share; 600 shares authorized as of both March 31, 2026 and December 31, 2025; 162 shares issued as of both March 31, 2026 and December 31, 2025	2		2
Additional paid-in capital	2,347		2,381
Retained earnings	10,151		9,994
Accumulated other comprehensive loss	(43)		(27)
Treasury stock, at cost; 51 shares and 52 shares as of March 31, 2026 and December 31, 2025, respectively	(5,091)		(5,180)
Total Quest Diagnostics stockholders’ equity	7,366		7,170
Noncontrolling interests	300		36
Total stockholders’ equity	7,666		7,206
Total liabilities and stockholders’ equity	$	16,673	$	16,225

The accompanying notes are an integral part of these statements.

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QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(unaudited)

(in millions)


	Three Months Ended March 31,
	2026		2025
Cash flows from operating activities:
Net income	$	264	$	235
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	147		140
Provision for credit losses	1		1
Deferred income tax expense	48		7
Stock-based compensation expense	20		22


Other, net	8		(1)
Changes in operating assets and liabilities:
Accounts receivable	(180)		(101)
Accounts payable and accrued expenses	(12)		(53)
Income taxes payable	13		15

Other assets and liabilities, net	(31)		49
Net cash provided by operating activities	278		314

Cash flows from investing activities:
Business acquisitions, net of cash acquired	(38)		—


Capital expenditures	(114)		(117)


Other investing activities, net	—		2
Net cash used in investing activities	(152)		(115)

Cash flows from financing activities:
Proceeds from borrowings	—		215
Repayments of debt	(1)		(600)

Exercise of stock options	65		29
Employee payroll tax withholdings on stock issued under stock-based compensation plans	(37)		(42)
Dividends paid	(88)		(84)
Distributions to noncontrolling interest partners	(7)		(18)


Other financing activities, net	(84)		(61)
Net cash used in financing activities	(152)		(561)

Effect of exchange rate changes on cash and cash equivalents and restricted cash	(1)		1

Net change in cash and cash equivalents and restricted cash	(27)		(361)

Cash and cash equivalents and restricted cash, beginning of period	420		549
Cash and cash equivalents and restricted cash, end of period	$	393	$	188

The accompanying notes are an integral part of these statements.

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QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(unaudited)

(in millions)


For the Three Months Ended March 31, 2026		Quest Diagnostics Stockholders’ Equity
	Shares of Common Stock Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Compre- hensive Loss		Treasury Stock, at Cost		Non- controlling Interests		Total Stock- holders’ Equity
Balance, December 31, 2025	110	$	2	$	2,381	$	9,994	$	(27)	$	(5,180)	$	36	$	7,206
Net income						252						11		263
Other comprehensive loss, net of taxes								(16)						(16)
Dividends declared						(95)								(95)
Distributions to noncontrolling interest partners												(5)		(5)
Issuance of common stock under benefit plans				(41)						48				7
Stock-based compensation expense				20										20
Exercise of stock options	1			6						59				65
Shares to cover employee payroll tax withholdings on stock issued under stock-based compensation plans				(19)						(18)				(37)

Contributions by noncontrolling interest partners												258		258
Balance, March 31, 2026	111	$	2	$	2,347	$	10,151	$	(43)	$	(5,091)	$	300	$	7,666


For the Three Months Ended March 31, 2025		Quest Diagnostics Stockholders’ Equity
	Shares of Common Stock Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Compre- hensive Loss		Treasury Stock, at Cost		Non- controlling Interests		Total Stock- holders’ Equity
Balance, December 31, 2024	111	$	2	$	2,361	$	9,360	$	(88)	$	(4,857)	$	35	$	6,813
Net income						220						12		232
Other comprehensive income, net of taxes								5						5
Dividends declared						(90)								(90)
Distributions to noncontrolling interest partners												(14)		(14)
Issuance of common stock under benefit plans	1			(54)						61				7
Stock-based compensation expense				22										22
Exercise of stock options										29				29
Shares to cover employee payroll tax withholdings on stock issued under stock-based compensation plans				(19)						(23)				(42)


Balance, March 31, 2025	112	$	2	$	2,310	$	9,490	$	(83)	$	(4,790)	$	33	$	6,962

The accompanying notes are an integral part of these statements.

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QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(in millions, unless otherwise indicated)

1. DESCRIPTION OF BUSINESS

Background

Quest Diagnostics Incorporated and its subsidiaries ("Quest Diagnostics" or the "Company") work across the healthcare ecosystem to create a healthier world, one life at a time. The Company's diagnostic information services ("DIS") business provides diagnostic insights from the results of its laboratory testing to empower people, physicians, and organizations to take action to improve health outcomes. Derived from one of the world's largest databases of de-identifiable clinical lab results, the Company's diagnostic insights reveal new avenues to identify and treat disease, inspire healthy behaviors and improve healthcare management. In the right hands and with the right context, the Company's diagnostic insights can inspire actions that transform lives and create a healthier world. The Company provides services to a broad range of customers within its primary customer channels - physicians (including those associated with accountable care organizations ("ACOs") and Federally Qualified Health Centers ("FQHCs")), hospitals, and patients and consumers. Other customers include health plans, employers, new and emerging retail healthcare providers, government agencies, pharmaceutical companies and other commercial clinical laboratories. The Company offers broad access to clinical testing through a network of laboratories, patient service centers, phlebotomists in physician offices, and connectivity resources, including call centers and mobile phlebotomists, nurses and other health and wellness professionals. The Company's large in-house staff of medical and scientific experts, including medical directors, scientific directors, genetic counselors and board-certified geneticists, provide medical and scientific consultation to healthcare providers and patients regarding the Company's tests and test results, and help them best utilize Quest Diagnostics' services to improve outcomes and enhance satisfaction. The Company's Diagnostic Solutions ("DS") group, which represents the balance of the Company's consolidated net revenues, includes the Company's risk assessment services business, which offers solutions for insurers, and the Company's healthcare information technology businesses, which offer solutions for healthcare providers and payers.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The interim unaudited consolidated financial statements reflect all adjustments which in the opinion of management are necessary for a fair statement of results of operations, comprehensive income, financial condition, cash flows and stockholders' equity for the periods presented. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s 2025 Annual Report on Form 10-K. The year-end balance sheet data was derived from the audited consolidated financial statements as of December 31, 2025 but does not include all the disclosures required by accounting principles generally accepted in the United States (“GAAP”).

The accounting policies of the Company are the same as those set forth in Note 2 to the audited consolidated financial statements contained in the Company’s 2025 Annual Report on Form 10-K.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Earnings Per Share

The Company's unvested restricted stock units that contain non-forfeitable rights to dividends are participating securities and, therefore, are included in the earnings allocation in computing earnings per share using the two-class method. Basic earnings per common share is calculated by dividing net income attributable to Quest Diagnostics, adjusted for earnings allocated to participating securities, by the weighted average number of common shares outstanding. Diluted earnings per common share is calculated by dividing net income attributable to Quest Diagnostics, adjusted for earnings allocated to

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QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(unaudited)

(in millions, unless otherwise indicated)

participating securities, by the weighted average number of common shares outstanding after giving effect to all potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the dilutive effect of outstanding stock options and performance share units granted under the Company's Amended and Restated Employee Long-Term Incentive Plan (“ELTIP”) and its Amended and Restated Non-Employee Director Long-Term Incentive Plan (“DLTIP”), as well as the dilutive effect of accelerated share repurchase agreements, if applicable. Earnings allocable to participating securities include the portion of dividends declared as well as the portion of undistributed earnings during the period allocable to participating securities.

New Accounting Standards to be Adopted

In November 2024, the Financial Accounting Standards Board ("FASB") issued a new accounting standard which will require companies to disaggregate certain income statement expenses. The pronouncement is effective for annual filings for the year ended December 31, 2027 and for interim periods within the year ended December 31, 2028. The Company does not expect the adoption of this standard to have a material impact on its results of operations, financial position or cash flows.

In September 2025, the FASB issued a new accounting standard which impacts internal-use software accounting by removing all references to software development project stages such that the guidance is neutral to different software development methods. The pronouncement is effective for annual filings for the year ended December 31, 2028 and for interim periods within such year. The Company is currently evaluating the impact of the standard.

3. EARNINGS PER SHARE

The computation of basic and diluted earnings per common share was as follows (in millions, except per share data):


	Three Months Ended March 31,
	2026		2025
Amounts attributable to Quest Diagnostics’ common stockholders:




Net income attributable to Quest Diagnostics	$	252	$	220
Less: Earnings allocated to participating securities	1		1
Earnings available to Quest Diagnostics’ common stockholders – basic and diluted	$	251	$	219

Weighted average common shares outstanding – basic	110		111
Effect of dilutive securities:
Stock options and performance share units	2		2
Weighted average common shares outstanding – diluted	112		113

Earnings per share attributable to Quest Diagnostics’ common stockholders:
Basic	$	2.27	$	1.97




Diluted	$	2.24	$	1.94

4. RESTRUCTURING ACTIVITIES

Invigorate Program

The Company is engaged in a multi-year program called Invigorate, which includes structured plans to drive savings and improve productivity across the value chain, including in such areas as patient services, logistics and laboratory operations, revenue services, information technology and procurement. The Invigorate program aims to deliver 3% annual cost savings and productivity improvements to partially offset pressures from the current inflationary environment, including labor and benefit cost increases and reimbursement pressures. The Company is leveraging automation and artificial intelligence to improve productivity and also improve quality across the entire value chain, not just in the laboratory. Other areas of focus include reducing denials and patient concessions, enhancing the digital experience, and selecting and retaining talent.

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QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(unaudited)

(in millions, unless otherwise indicated)

Restructuring Charges

The Company's pre-tax restructuring charges for the three months ended March 31, 2026 and 2025 were $7 million and $11 million, respectively, entirely related to employee separation costs associated with various workforce reduction initiatives as the Company continued to restructure its organization. Of the total restructuring charges incurred during the three months ended March 31, 2026, $2 million and $5 million were recorded in cost of services and selling, general and administrative expenses, respectively. Of the total restructuring charges incurred during the three months ended March 31, 2025, $6 million and $5 million were recorded in cost of services and selling, general and administrative expenses, respectively.

Charges for all periods presented were primarily recorded in the Company's DIS business.

The restructuring liability as of both March 31, 2026 and December 31, 2025, which is included in accounts payable and accrued expenses, was $18 million.

5. BUSINESS ACQUISITIONS

During August 2025, the Company and Corewell Health signed a definitive agreement to form a new entity which will perform laboratory testing in the state of Michigan via a new laboratory facility. The parties completed the transaction during January 2026. In connection with the transaction, Corewell Health contributed a laboratory business over which the Company obtained a controlling financial interest. Under the terms of the transaction, the Company and Corewell Health are continuing to serve providers and patients in Michigan from their existing patient service centers (which are operated by the newly formed entity) and their existing laboratories until a new laboratory is operational during 2027. Equity ownership of the newly formed entity is shared 51% by the Company and 49% by Corewell Health and the Company is consolidating the entity in its consolidated financial statements.

The total purchase consideration transferred to Corewell Health in conjunction with the formation of the entity included $38 million of cash consideration and a 49% non-controlling interest in the entity, with such interest valued at $253 million.

Based on the preliminary purchase price allocation, which may be revised as additional information becomes available during the measurement period, the assets acquired and liabilities assumed principally consist of $179 million of goodwill, of which $22 million is deductible for tax purposes, $124 million of customer-related intangible assets, $20 million of operating lease assets, $20 million of operating lease liabilities, and $12 million of deferred income tax liabilities. The intangible assets are being amortized over a useful life of 15 years.

The acquisition described above was accounted for under the acquisition method of accounting. As such, the assets acquired and liabilities assumed are recorded based on their estimated fair values as of the closing date. The goodwill recorded primarily includes the expected synergies resulting from combining the operations of the acquired entity with those of the Company and the value associated with an assembled workforce and other intangible assets that do not qualify for separate recognition. All of the goodwill acquired in connection with the acquisition has been allocated to the Company's DIS business. For further details regarding business segment information, see Note 11. Supplemental pro forma combined financial information, and financial information subsequent to the acquisition close date, has not been presented as the impact of the acquisition is not material to the Company's consolidated financial statements.

For details regarding the Company's 2025 acquisitions, see Note 6 to the audited consolidated financial statements in the Company's 2025 Annual Report on Form 10-K.

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QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(unaudited)

(in millions, unless otherwise indicated)

6. FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table provides a summary of the recognized assets and liabilities that are measured at fair value on a recurring basis:


			Basis of Fair Value Measurements

			Quoted Prices in Active Markets for Identical Assets/Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
March 31, 2026	Total		Level 1		Level 2		Level 3
Assets:

Deferred compensation trading securities	$	84	$	84	$	—	$	—
Cash surrender value of life insurance policies	67		—		67		—



Fixed-to-variable interest rate swaps	3		—		3		—
Total	$	154	$	84	$	70	$	—

Liabilities:
Deferred compensation liabilities	$	152	$	—	$	152	$	—


Contingent consideration	99		—		—		99
Fixed-to-variable interest rate swaps	2		—		2		—
Total	$	253	$	—	$	154	$	99

Redeemable noncontrolling interest	$	79	$	—	$	—	$	79


			Basis of Fair Value Measurements
December 31, 2025	Total		Level 1		Level 2		Level 3
Assets:
Deferred compensation trading securities	$	78	$	78	$	—	$	—
Cash surrender value of life insurance policies	72		—		72		—
Equity investments	2		2		—		—

Fixed-to-variable interest rate swaps	14		—		14		—


Total	$	166	$	80	$	86	$	—

Liabilities:
Deferred compensation liabilities	$	150	$	—	$	150	$	—

Contingent consideration	96

SEC Form 10-Q filed by Quest Diagnostics Incorporated