Labcorp (NYSE: LH) raises its outlook after adjusted EPS climbs 14.5%

What happened

Labcorp Holdings Inc. (NYSE: LH) raised its 2026 revenue growth and adjusted EPS guidance after third-quarter adjusted EPS rose 14.5% to $4.78.

Revenue for the quarter ended Sept. 30 was $3.81 billion, up 6.9% from $3.56 billion a year earlier. Diluted EPS was $3.22 against $3.12, a 3.3% gain.

The company now expects 2026 enterprise revenue growth of 5.9% to 6.7%, up from 5.4% to 6.3%. That puts revenue at $14.78 billion to $14.89 billion, against $13.95 billion in 2025.

Adjusted EPS guidance moves to $18.30 to $18.70 from $18.10 to $18.55, up 18 cents at the midpoint. Free cash flow guidance is unchanged at $1.24 billion to $1.36 billion.

Key numbers

Metric	Latest	Change	Source
Third-quarter revenue	$3.81 billion	from $3.56 billion, +6.9%	SEC 8-K Exhibit 99.1
Adjusted EPS	$4.78	from $4.18, +14.5%	SEC 8-K Exhibit 99.1
Diluted EPS	$3.22	from $3.12, +3.3%	SEC 8-K Exhibit 99.1
Free cash flow	$412.2 million	from $280.5 million, +47.0%	Calculated from SEC 8-K Exhibit 99.1
Biopharma Laboratory Services adjusted operating margin	18.3%	from 16.5%, +1.8 percentage points	SEC 8-K Exhibit 99.1
2026 adjusted EPS guidance	$18.30 to $18.70	+$0.18 at the midpoint	SEC 8-K Exhibit 99.1

Read more: Labcorp (LH) company research

Where the growth came from

Organic growth did most of the work. It added 5.5 percentage points to revenue growth. Acquisitions net of divestitures added 1.5 points and currency took away 0.1 point.

Diagnostics Laboratories revenue rose 6.5% to $2.95 billion. Organic growth added 4.4 points and acquisitions net of divestitures added 2.2 points. Adjusted operating margin was 16.7% against 16.3%, which the filing attributes to organic growth and operating efficiencies.

Biopharma Laboratory Services grew faster. Revenue rose 8.5% to $866.7 million, with organic growth of 9.6%. Central Labs revenue grew 11.5% and Early Development revenue grew 0.4%.

Its adjusted operating margin widened 180 basis points to 18.3%. The filing credits organic growth and efficiencies from strategic actions in Early Development. Backlog stood at $8.92 billion, up 3.9% from a year earlier, and trailing-twelve-month book-to-bill was 1.10.

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Adjusted gains outran GAAP earnings

The adjusted and GAAP pictures diverge. GAAP operating income was $402.1 million against $396.6 million. GAAP operating margin slipped to 10.6% from 11.1%, a 60 basis point decline.

By OptimistFi's calculation, the adjustments added back to operating income rose 43.9% to $167.9 million from $116.7 million. They include LaunchPad costs of $28.6 million, up from $13.7 million, and acquisition and disposition-related costs of $23.0 million, up from $10.8 million.

Net earnings attributable to Labcorp were $262.8 million against $261.1 million. Weighted-average diluted shares fell to 81.6 million from 83.7 million.

Cash flow was stronger. By OptimistFi's calculation, free cash flow rose 47.0% to $412.2 million from $280.5 million. The filing says better working capital drove the increase. Planned capital spending of $151.6 million, against $106.7 million, partly offset it.

Why it matters

OptimistFi has argued that Labcorp's scale lab network must stay indispensable to doctors, hospitals and biopharma customers. Automation and mix must also offset reimbursement pressure. Margin gains in both segments and the raised outlook strengthen that view.

Labcorp acquired MLM Medical Labs, a central and specialty laboratory provider with operations across the United States, Germany and South Africa. After quarter end it signed three agreements, for select BioReference Health laboratory assets, Myriad Genetics' Prenatal Health testing business and Millennium Health. Labcorp expects each of the four deals to add to adjusted EPS in year one and to earn back its cost of capital by year three.

On the product side, Labcorp received FDA approval of its PGDx elio tissue complete CDx as a companion diagnostic to help identify patients with advanced melanoma. After quarter end it launched the FDA-cleared Elecsys pTau-217 blood test for Alzheimer's disease testing.

The caveats are specific. The three post-quarter deals need regulatory approvals and must meet customary closing conditions, so part of the growth story is not yet complete. GAAP operating margin fell while adjusted margin rose. The filing also lists changes in payer regulations or policies among factors that could change results.

Cash ended the quarter at $261.8 million, down from $532.3 million at Dec. 31, 2025. Total debt was $5.85 billion. Labcorp invested $255.5 million in acquisitions and paid $58.2 million in dividends. Up to $1.4 billion remains under its board-authorized repurchase program.

What's next

Labcorp holds a webcast on the quarterly results at 9 a.m. ET on Oct. 28. The quarterly dividend of $0.72 per share, announced Oct. 21, is payable Dec. 11 to holders of record at the close of business Nov. 24.

The next test is whether the BioReference Health, Myriad Genetics Prenatal Health and Millennium Health deals win regulatory approval and deliver the year-one adjusted EPS gain Labcorp expects. The 2026 guidance already includes the estimated impact of currently anticipated capital allocation, including acquisitions, share repurchases and dividends.

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