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What changed in Quest Diagnostics's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Quest Diagnostics's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+393 added−404 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-20)

Top changes in Quest Diagnostics's 2025 10-K

393 paragraphs added · 404 removed · 338 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

257 edited+33 added−54 removed263 unchanged
Biggest changeResults of Operations The following table sets forth certain results of operations data for the periods presented: 2024 2023 $ Change % Change (dollars in millions, except per share data) Net revenues: DIS business $ 9,614 $ 8,976 $ 638 7.1 % DS businesses 258 276 (18) (6.3) Total net revenues $ 9,872 $ 9,252 $ 620 6.7 % Operating costs and expenses and other operating income: Cost of services $ 6,628 $ 6,199 $ 429 6.9 % Selling, general and administrative 1,770 1,642 128 7.7 Amortization of intangible assets 127 108 19 17.9 Other operating expense, net 1 41 (40) NM Total operating costs and expenses, net $ 8,526 $ 7,990 $ 536 6.7 % Operating income $ 1,346 $ 1,262 $ 84 6.7 % Other income (expense): Interest expense, net $ (201) $ (152) $ (49) 32.3 % Other income, net 30 20 10 NM Total non-operating expense, net $ (171) $ (132) $ (39) NM Income tax expense $ (273) $ (248) $ (25) 10.1 % Effective income tax rate 23.2 % 22.0 % Equity in earnings of equity method investees, net of taxes $ 19 $ 26 $ (7) (27.9) % Net income attributable to Quest Diagnostics $ 871 $ 854 $ 17 2.0 % Diluted earnings per share attributable to Quest Diagnostics’ common stockholders $ 7.69 $ 7.49 $ 0.20 2.7 % NM - Not Meaningful 66 Table of Contents The following table sets forth certain results of operations data as a percentage of net revenues for the periods presented: 2024 2023 Net revenues: DIS business 97.4 % 97.0 % DS businesses 2.6 3.0 Total net revenues 100.0 % 100.0 % Operating costs and expenses and other operating income: Cost of services 67.2 % 67.0 % Selling, general and administrative 17.9 17.7 Amortization of intangible assets 1.3 1.2 Other operating expense, net — 0.5 Total operating costs and expenses, net 86.4 % 86.4 % Operating income 13.6 % 13.6 % Operating Results Results for the year ended December 31, 2024 were affected by certain items that on a net basis decreased diluted earnings per share by $1.24 as follows: • pre-tax amortization expense of $127 million recorded in amortization of intangible assets or $0.84 per diluted share; • pre-tax net charges of $62 million ($27 million recorded in cost of services and $37 million recorded in selling, general and administrative expenses, partially offset by a $2 million gain recorded in other operating expense, net), or $0.42 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business; • pre-tax charges of $15 million recorded in equity in earnings of equity method investees, net of taxes, or $0.10 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments ; and • pre-tax charges of $6 million ($2 million recorded in cost of services, $2 million recorded in selling, general and administrative expenses and $2 million recorded in other operating expense, net, including a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions), or $0.04 per diluted share; partially offset by • pre-tax gains of $12 million, recorded in other income (expense), net, or $0.08 per diluted share, principally representing a non-recurring gain associated with a foreign exchange forward contract utilized in conjunction with an acquisition, and • $9 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.08 per diluted share.
Biggest changeResults of Operations The following table sets forth certain results of operations data for the periods presented: 2025 2024 $ Change % Change (dollars in millions, except per share data) Net revenues: DIS business $ 10,785 $ 9,614 $ 1,171 12.2 % DS businesses 250 258 (8) (3.3) Total net revenues $ 11,035 $ 9,872 $ 1,163 11.8 % Operating costs and expenses and other operating income: Cost of services $ 7,370 $ 6,628 $ 742 11.2 % Selling, general and administrative 1,967 1,770 197 11.1 Amortization of intangible assets 154 127 27 20.8 Other operating (income) expense, net (12) 1 (13) NM Total operating costs and expenses, net $ 9,479 $ 8,526 $ 953 11.2 % Operating income $ 1,556 $ 1,346 $ 210 15.6 % Other income (expense): Interest expense, net $ (264) $ (201) $ (63) 31.5 % Other income, net 26 30 (4) NM Total non-operating expense, net $ (238) $ (171) $ (67) NM Income tax expense $ (314) $ (273) $ (41) 14.9 % Effective income tax rate 23.8 % 23.2 % Equity in earnings of equity method investees, net of taxes $ 42 $ 19 $ 23 120.5 % Net income attributable to Quest Diagnostics $ 992 $ 871 $ 121 13.9 % Diluted earnings per share attributable to Quest Diagnostics’ common stockholders $ 8.75 $ 7.69 $ 1.06 13.8 % NM - Not Meaningful 67 Table of Contents The following table sets forth certain results of operations data as a percentage of net revenues for the periods presented: 2025 2024 Net revenues: DIS business 97.7 % 97.4 % DS businesses 2.3 2.6 Total net revenues 100.0 % 100.0 % Operating costs and expenses and other operating income: Cost of services 66.8 % 67.2 % Selling, general and administrative 17.8 17.9 Amortization of intangible assets 1.4 1.3 Other operating (income) expense, net (0.1) — Total operating costs and expenses, net 85.9 % 86.4 % Operating income 14.1 % 13.6 % Operating Results Results for the year ended December 31, 2025 were affected by certain items that on a net basis decreased diluted earnings per share by $1.10 as follows: • pre-tax amortization expense of $154 million (recorded in amortization of intangible assets) or $1.01 per diluted share; • pre-tax charges of $53 million ($12 million recorded in cost of services, $40 million recorded in selling, general and administrative expenses and $1 million in other operating (income) expense, net), or $0.39 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business; and • pre-tax charges of $52 million, or $0.34 per diluted share, ($29 million recorded in other operating (income) expense, net for an impairment charge on certain long-lived assets related to the exit of a business; and $7 million and $15 million recorded in selling, general and administrative expenses and other operating (income) expense, net, respectively, for charges to earnings related to legal matters); partially offset by • pre-tax gains of $54 million ($46 million recorded in other operating (income) expense, net and $8 million recorded in equity in earnings of equity method investees, net of taxes), or $0.36 per diluted share, from a $46 million payroll tax credit under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") associated with the retention of employees and an $8 million non-recurring gain related to a lease; • a pre-tax gain of $10 million (recorded in other operating (income) expense, net), or $0.09 per diluted share, associated with the decrease in the fair value of the contingent consideration accrual associated with previous acquisitions; • pre-tax gains of $4 million (principally recorded in other income, net), or $0.03 per diluted share, representing net gains associated with changes in the carrying value of our strategic investments, and • $18 million of excess tax benefits associated with stock-based compensation arrangements (recorded in income tax expense), or $0.16 per diluted share.
Other Operating Expense, Net Other operating expense, net includes miscellaneous income and expense items and other charges related to operating activities.
Other Operating (Income) Expense, Net Other operating (income) expense, net includes miscellaneous income and expense items and other charges related to operating activities.
Other Income (Expense), Net Other income, net represents miscellaneous income and expense items related to non-operating activities, such as gains and losses associated with investments and other non-operating assets.
Other Income, Net Other income, net represents miscellaneous income and expense items related to non-operating activities, such as gains and losses associated with investments and other non-operating assets.
Government Payers Reimbursements from domestic government payers are based on fee-for-service schedules set by governmental authorities, including traditional Medicare and Medicaid. Reimbursements from government payers in Canada are based on a combination of fee-for-service schedules, with a cap on maximum billings, and capitated arrangements.
Government Payers Reimbursements from domestic government payers are based on fee-for-service schedules set by governmental authorities, including traditional Medicare and Medicaid. Reimbursements from government payers in Canada are based on a combination of fee-for-service schedules, with a cap on maximum billings, and capitated arrangements.
In connection with the acquisition of Haystack (see Note 6 for further discussion), there is a contingent consideration obligation under which the seller can receive up to $100 million of additional consideration dependent upon the achievement of certain revenue benchmarks through 2028 and up to an additional $50 million of consideration dependent upon the Company receiving reimbursement coverage from the CMS.
In connection with the acquisition of Haystack (see Note 6 for further discussion), there is a contingent consideration obligation under which the seller can receive up to $100 million of additional consideration dependent upon the achievement of certain revenue benchmarks through 2028 and up to an additional $50 million of consideration dependent upon the Company receiving reimbursement coverage from CMS.
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, emerging retail healthcare providers, government agencies, pharmaceutical companies and other commercial clinical laboratories.
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.
Client Payers Client payers include physicians, hospitals, employers, emerging retail healthcare providers, pharmaceutical companies and other commercial clinical laboratories and institutions for which services are performed on a wholesale basis, and are billed based on negotiated fee schedules. Credit risk and ability to pay are more of a consideration for these payers than healthcare insurers and government payers.
Client Payers Client payers include physicians, hospitals, employers, new and emerging retail healthcare providers, pharmaceutical companies and other commercial clinical laboratories and institutions for which services are performed on a wholesale basis, and are billed based on negotiated fee schedules. Credit risk and ability to pay are more of a consideration for these payers than healthcare insurers and government payers.
In October 2020, the court consolidated the two lawsuits under the caption In re: Quest Diagnostics ERISA Litigation and plaintiffs filed a consolidated amended complaint. In May 2021, the court denied the Company's motion to dismiss the complaint. After discovery was completed, the Company's filed a motion for summary judgment, which was granted. The matter is on appeal.
In October 2020, the court consolidated the two lawsuits under the caption In re: Quest Diagnostics ERISA Litigation and plaintiffs filed a consolidated amended complaint. In May 2021, the court denied the Company's motion to dismiss the complaint. After discovery was completed, the Company filed a motion for summary judgment, which was granted. The matter is on appeal.
In the Company's consolidated statement of cash flows for the year ended December 31, 2024, such $30 million is included in business acquisitions, net of cash acquired, with a corresponding offset in other investing activities. The acquisitions preliminarily resulted in goodwill of $1.1 billion, $862 million of which is deductible for tax purposes.
In the Company's consolidated statement of cash flows for the year ended December 31, 2024, such $30 million is included in business acquisitions, net of cash acquired, with a corresponding offset in other investing activities. The acquisitions resulted in goodwill of $1.1 billion, $862 million of which is deductible for tax purposes.
For example, changing the comparable company revenue volatility from 35% to 25% impacts the fair value by $5 million (assuming no other inputs are modified) and changing the discount rate from 10.5% to 7.0% impacts the fair value by $3 million (assuming no other inputs are modified). The Company has additional contingent consideration obligations in connection with other acquisitions.
For example, changing the comparable company revenue volatility from 25% to 35% impacts the fair value by $5 million (assuming no other inputs are modified) and changing the discount rate from 7.0% to 10.5% impacts the fair value by $5 million (assuming no other inputs are modified). The Company has additional contingent consideration obligations in connection with other acquisitions.
For a derivative instrument that has been formally designated as a fair value hedge, fair value gains or losses on the derivative instrument along with offsetting fair value gains or losses on the hedged item that are attributable to the risk being hedged are reported in other income (expense), net in the consolidated statements of operations.
For a derivative instrument that has been formally designated as a fair value hedge, fair value gains or losses on the derivative instrument along with offsetting fair value gains or losses on the hedged item that are attributable to the risk being hedged are reported in other income, net in the consolidated statements of operations.
Additionally, the amended facility includes a $200 million uncommitted accordion which, if utilized, brings the total capacity under the facility to $800 million. The entire facility can be used for borrowings. Additionally, the Company can choose to utilize up to $150 million of such capacity to issue letters of credit (see Note 18).
The facility includes a $200 million uncommitted accordion which, if utilized, brings the total capacity under the facility to $800 million. The entire facility can be used for borrowings. Additionally, the Company can choose to utilize up to $150 million of such capacity to issue letters of credit (see Note 18).
F-14 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) Comprehensive Income (Loss) Comprehensive income (loss) encompasses all changes in stockholders' equity (except those arising from transactions with stockholders) and includes: • Foreign currency translation adjustments; • Net deferred gains (losses) on cash flow hedges, which represent deferred gains (losses), net of tax, on interest rate-related derivative financial instruments designated as cash flow hedges, net of amounts reclassified to interest expense (see Notes 15 and 16); and • Net changes in available-for-sale debt securities, which represent unrealized holding gains (losses), net of tax, on available-for-sale debt securities.
F-13 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) Comprehensive Income (Loss) Comprehensive income (loss) encompasses all changes in stockholders' equity (except those arising from transactions with stockholders) and includes: • Foreign currency translation adjustments; • Net deferred gains (losses) on cash flow hedges, which represent deferred gains (losses), net of tax, on interest rate-related derivative financial instruments designated as cash flow hedges, net of amounts reclassified to interest expense (see Notes 15 and 16); and • Net changes in available-for-sale debt securities, which represent unrealized holding gains (losses), net of tax, on available-for-sale debt securities.
For the year ended December 31, 2024, other income (expense), net included included $18 million of gains associated with investments in our deferred compensation plans and an $8 million gain associated with a foreign exchange forward contract utilized in conjunction with an acquisition.
For the year ended December 31, 2024, other income, net included $18 million of gains associated with investments in our deferred compensation plans and an $8 million gain associated with a foreign exchange forward contract utilized in conjunction with an acquisition.
Additionally, for such other acquisitions, it is impracticable to provide this financial information due to a variety of factors, including access to historical information and the operations of the acquirees being significantly integrated into the Company's cost structure shortly after the closing of the acquisitions.
Additionally, for such other acquisitions, it is impracticable to provide this financial information due to a variety of factors, including access to historical information and the operations of the acquirees being significantly integrated into the Company's cost structure shortly after the closing of the acquisitions. 7.
Gains and losses from foreign currency transactions, which are denominated in a currency other than the functional currency, are included within other operating expense, net in the consolidated statements of operations. Foreign currency transaction gains and losses have historically not been material.
Gains and losses from foreign currency transactions, which are denominated in a currency other than the functional currency, are included within other operating (income) expense, net in the consolidated statements of operations. Foreign currency transaction gains and losses have historically not been material.
F-10 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) Fair Value Measurements The Company determines fair value measurements used in its consolidated financial statements based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants exclusive of any transaction costs, as determined by either the principal market or the most advantageous market.
F-9 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) Fair Value Measurements The Company determines fair value measurements used in its consolidated financial statements based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants exclusive of any transaction costs, as determined by either the principal market or the most advantageous market.
The impacts of recent accounting pronouncements not yet effective (if any) on our audited consolidated financial statements are discussed in Note 2 to the audited consolidated financial statements. 73 Table of Contents REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING The management of the Company, including its Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended.
The impacts of recent accounting pronouncements not yet effective (if any) on our audited consolidated financial statements are discussed in Note 2 to the audited consolidated financial statements. 74 Table of Contents REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING The management of the Company, including its Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended.
Depreciation and amortization are principally provided on the straight-line method over expected useful asset lives as of December 31, 2024 as follows: • buildings and improvements, ranging up to thirty-one and a half years; • laboratory equipment and furniture and fixtures, ranging from five to twelve years; • leasehold improvements, the lesser of the useful life of the improvement or the remaining life of the building or lease, as applicable; and • computer software developed or obtained for internal use, principally five to ten years.
Depreciation and amortization are principally provided on the straight-line method over expected useful asset lives as of December 31, 2025 as follows: • buildings and improvements, ranging up to thirty-one and a half years; • laboratory equipment and furniture and fixtures, ranging from five to twelve years; • leasehold improvements, the lesser of the useful life of the improvement or the remaining life of the building or lease, as applicable; and • computer software developed or obtained for internal use, principally five to ten years.
F-44 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) Supplemental Deferred Compensation Plans The Company has a supplemental deferred compensation plan that is an unfunded, non-qualified plan that provides for certain management and highly compensated employees to defer up to 50% of their salary in excess of their defined contribution plan limits and for certain eligible employees, up to 95% of their variable incentive compensation.
F-44 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) Supplemental Deferred Compensation Plans The Company has a supplemental deferred compensation plan that is an unfunded, non-qualified plan that provides for certain management and highly compensated employees to defer up to 50% of their salary in excess of their defined contribution plan limits and for certain eligible employees, up to 85% of their variable incentive compensation.
Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and F-9 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) 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.
Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and F-8 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) 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.
We identified the following reporting units for goodwill impairment testing in 2024: • DIS business; • Risk assessment services business, which is part of our DS businesses The DIS reporting unit components have been aggregated into a single reporting unit because they have similar economic characteristics, including similarities in financial performance, nature of products or services, nature of production processes and types of customers.
We identified the following reporting units for goodwill impairment testing in 2025: • DIS business; • Risk assessment services business, which is part of our DS businesses The DIS reporting unit components have been aggregated into a single reporting unit because they have similar economic characteristics, including similarities in financial performance, nature of products or services, nature of production processes and types of customers.
The indefinite-lived intangible asset impairment test is performed at least annually, or more frequently in the case of other events that indicate a potential impairment. Based upon the Company’s most recent annual impairment tests completed during the fourth quarter of the years ended December 31, 2024 and 2023, the Company concluded that indefinite-lived intangible assets were not impaired.
The indefinite-lived intangible asset impairment test is performed at least annually, or more frequently in the case of other events that indicate a potential impairment. Based upon the Company’s most recent annual impairment tests completed during the fourth quarter of the years ended December 31, 2025 and 2024, the Company concluded that indefinite-lived intangible assets were not impaired.
See Note 7 for a discussion of the fair value of such investments. F-13 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) • Equity investments that do not have readily determinable fair values consist of investments in preferred and common shares of privately held companies.
See Note 7 for a discussion of the fair value of such investments. F-12 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) • Equity investments that do not have readily determinable fair values consist of investments in preferred and common shares of privately held companies.
F-16 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) Collection of the Company's net revenues from government payers is normally a function of providing the complete and correct billing information within the various filing deadlines and generally occurs within 30 days of billing.
F-15 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) Collection of the Company's net revenues from government payers is normally a function of providing the complete and correct billing information within the various filing deadlines and generally occurs within 30 days of billing.
As of December 31, 2024, there was $5 million of unrecognized stock-based compensation cost related to nonvested stock options which is expected to be recognized over a weighted average period of 1.6 years. The fair value of restricted stock awards and restricted stock units is the average market price of the Company's common stock at the date of grant.
As of December 31, 2025, there was $5 million of unrecognized stock-based compensation cost related to nonvested stock options which is expected to be recognized over a weighted average period of 1.6 years. The fair value of restricted stock awards and restricted stock units is the average market price of the Company's common stock at the date of grant.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.
These investments are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes. The Company regularly evaluates these equity investments to determine if there are any indicators that the investment is impaired; no impairment charges were recognized related to these investments for the years ended December 31, 2024, 2023 and 2022.
These investments are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes. The Company regularly evaluates these equity investments to determine if there are any indicators that the investment is impaired; no impairment charges were recognized related to these investments for the years ended December 31, 2025, 2024 and 2023.
For each of the years ended December 31, 2024, 2023 and 2022, the Company's expense for matching contributions to these plans was not material. 18. COMMITMENTS AND CONTINGENCIES Letters of Credit and Contractual Obligations The Company can issue letters of credit under its Secured Receivables Credit Facility and Senior Unsecured Revolving Credit Facility (see Note 13).
For each of the years ended December 31, 2025, 2024 and 2023, the Company's expense for matching contributions to these plans was not material. 18. COMMITMENTS AND CONTINGENCIES Letters of Credit and Contractual Obligations The Company can issue letters of credit under its Secured Receivables Credit Facility and Senior Unsecured Revolving Credit Facility (see Note 13).
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.
The Invigorate program aims to deliver 3% annual cost savings and productivity improvements to partially offset pressures from an 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.
The Secured Receivables Credit Facility is subject to customary affirmative and negative covenants and F-34 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) certain financial covenants with respect to the receivables that comprise the borrowing base and secure the borrowings under the facility.
The Secured Receivables Credit Facility is subject to customary affirmative and negative covenants and certain financial covenants with respect to the receivables that comprise the borrowing base and F-33 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) secure the borrowings under the facility.
As of December 31, 2024 , the Company's borrowing rate for Term SOFR-based loans under the Credit Facility was adjusted Term SOFR plus 1.00%. The Credit Facility contains various covenants, including the maintenance of a financial leverage ratio, which could impact the Company's ability to, among other things, incur additional indebtedness.
As of December 31, 2025 , the Company's borrowing rate for Term SOFR-based loans under the Credit Facility was adjusted Term SOFR plus 1.00%. The Credit Facility contains various covenants, including the maintenance of a financial leverage ratio, which could impact the Company's ability to, among other things, incur additional indebtedness.
F-8 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (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.
F-7 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (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.
Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. For the years ended December 31, 2024, 2023, and 2022, lease expense associated with short-term leases was not material.
Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. For the years ended December 31, 2025, 2024, and 2023, lease expense associated with short-term leases was not material.
As of December 31, 2024, the borrowing rates under these debt instruments were: for our secured receivables credit facility, commercial paper rates for highly rated issuers or the adjusted Term SOFR, plus a spread of 0.80%; and for our senior unsecured revolving credit facility, the adjusted Term SOFR, plus 1.00%.
As of December 31, 2025, the borrowing rates under these debt instruments were: for our secured receivables credit facility, commercial paper rates for highly rated issuers or the adjusted Term SOFR, plus a spread of 0.80%; and for our senior unsecured revolving credit facility, the adjusted Term SOFR, plus 1.00%.
For the years ended December 31, 2024, 2023, and 2022, the tax effects related to the deferred gains (losses) on cash flow hedges were not material. Foreign currency translation adjustments related to indefinite investments in non-U.S. subsidiaries are not adjusted for income taxes.
For the years ended December 31, 2025, 2024, and 2023, the tax effects related to the deferred gains (losses) on cash flow hedges were not material. Foreign currency translation adjustments related to indefinite investments in non-U.S. subsidiaries are not adjusted for income taxes.
The remaining terms of the lease obligations and the Company's corresponding indemnifications range up to 23 years. The lease payments under certain leases are subject to market value adjustments and contingent rental payments and therefore, the total contingent obligations under the leases cannot be precisely determined but are likely to total several hundred million dollars.
The remaining terms of the lease obligations and the Company's corresponding indemnifications range up to 22 years. The lease payments under certain leases are subject to market value adjustments and contingent rental payments and therefore, the total contingent obligations under the leases cannot be precisely determined but are likely to total several hundred million dollars.
PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited the financial statements included in this annual report, audited the Company's internal control over financial reporting as of December 31, 2024 and issued their audit report on the Company's internal control over financial reporting included herein. 74 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Quest Diagnostics Incorporated Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Quest Diagnostics Incorporated and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the “consolidated financial statements”).
PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited the financial statements included in this annual report, audited the Company's internal control over financial reporting as of December 31, 2025 and issued their audit report on the Company's internal control over financial reporting included herein. 75 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Quest Diagnostics Incorporated Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Quest Diagnostics Incorporated and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”).
See "Available Information." Basis of Presentation Our DIS business currently represents our one reportable business segment. The DIS business for the years ended December 31, 2024 and 2023 accounted for greater than 95% of our consolidated net revenues. Our other operating segments consist of our DS businesses.
See "Available Information." Basis of Presentation Our DIS business currently represents our one reportable business segment. The DIS business for the years ended December 31, 2025 and 2024 accounted for greater than 95% of our consolidated net revenues. Our other operating segments consist of our DS businesses.
These matters are in different stages. Some of these matters are in their early stages. Matters may involve responding to and cooperating with various government investigations and related subpoenas. As of December 31, 2024, the Company does not believe that material losses related to legal matters are probable.
These matters are in different stages. Some of these matters are in their early stages. Matters may involve responding to and cooperating with various government investigations and related subpoenas. As of December 31, 2025, the Company does not believe that material losses related to legal matters are probable.
The Company's leases have remaining terms of less than 1 year to 14 years, some of which include options to extend the leases for up to approximately 20 years. The Company's lease terms may include renewal options that are reasonably certain to be exercised and termination options that are reasonably certain not to be exercised.
The Company's leases have remaining terms of less than 1 year to 19 years, some of which include options to extend the leases for up to approximately 20 years. The Company's lease terms may include renewal options that are reasonably certain to be exercised and termination options that are reasonably certain not to be exercised.
F-22 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) LifeLabs Laboratory Business of Three Physician Groups in New York Select Assets of the Outreach Laboratory Services Business of Allina Health Select Assets of the Outreach Laboratory Services Business of OhioHealth Outreach Laboratory Services Business of University Hospitals Other Acquisitions (a) Total Cash and cash equivalents $ 50 $ — $ — $ — $ — $ — $ 50 Accounts receivable 31 — — — — — 31 Other current assets 23 — — — — 2 25 Property, plant and equipment 250 — — — — 4 254 Finance lease assets (recorded in property, plant and equipment) — — — — — 17 17 Operating lease right-of-use assets 65 — — — — 17 82 Goodwill 303 243 175 146 125 154 1,146 Intangible assets 434 57 55 54 58 95 753 Other assets 39 — — — — — 39 Total assets acquired 1,195 300 230 200 183 289 2,397 Accounts payable and accrued expenses 66 — — — — — 66 Current portion of long-term operating lease liabilities 14 — — — — 4 18 Finance lease liabilities (recorded in long-term debt) — — — — — 17 17 Long-term operating lease liabilities 51 — — — — 13 64 Other liabilities 11 — — — — 7 18 Total liabilities assumed 142 — — — — 41 183 Net assets acquired $ 1,053 $ 300 $ 230 $ 200 $ 183 $ 248 $ 2,214 (a) Principally relates to the acquisitions of Lenco and PathAI Diagnostics.
F-21 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) LifeLabs Laboratory Business of Three Physician Groups in New York Select Assets of the Outreach Laboratory Services Business of Allina Health Select Assets of the Outreach Laboratory Services Business of OhioHealth Outreach Laboratory Services Business of University Hospitals Other Acquisitions (a) Total Cash and cash equivalents $ 50 $ — $ — $ — $ — $ — $ 50 Accounts receivable 31 — — — — — 31 Other current assets 23 — — — — 2 25 Property, plant and equipment 250 — — — — 4 254 Finance lease assets (recorded in property, plant and equipment) — — — — — 17 17 Operating lease right-of-use assets 65 — — — — 17 82 Goodwill 294 243 175 146 125 154 1,137 Intangible assets 434 57 55 54 58 95 753 Other assets 48 — — — — — 48 Total assets acquired 1,195 300 230 200 183 289 2,397 Accounts payable and accrued expenses 66 — — — — — 66 Current portion of long-term operating lease liabilities 14 — — — — 4 18 Finance lease liabilities (recorded in long-term debt) — — — — — 17 17 Long-term operating lease liabilities 51 — — — — 13 64 Other liabilities 11 — — — — 7 18 Total liabilities assumed 142 — — — — 41 183 Net assets acquired $ 1,053 $ 300 $ 230 $ 200 $ 183 $ 248 $ 2,214 (a) Principally relates to the acquisitions of Lenco and PathAI Diagnostics.
Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2024 based on criteria for effective internal control over financial reporting described in “Internal Control - Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2025 based on criteria for effective internal control over financial reporting described in “Internal Control - Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission.
REVENUE RECOGNITION DIS Net revenues in the Company’s DIS business accounted for greater than 95% of the Company’s consolidated net revenues for the years ended December 31, 2024, 2023 and 2022 and are primarily comprised of a high volume of relatively low-dollar transactions.
REVENUE RECOGNITION DIS Net revenues in the Company’s DIS business accounted for greater than 95% of the Company’s consolidated net revenues for the years ended December 31, 2025, 2024 and 2023 and are primarily comprised of a high volume of relatively low-dollar transactions.
We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
The senior notes are included in current portion of long-term debt in the Company's December 31, 2024 consolidated balance sheet. Such notes were included in long-term debt in the Company's December 31, 2023 consolidated balance sheet. All of the senior notes are unsecured obligations of the Company and rank equally with the Company's other senior unsecured obligations.
The senior notes are included in current portion of long-term debt in the Company's December 31, 2025 consolidated balance sheet. Such notes were included in long-term debt in the Company's December 31, 2024 consolidated balance sheet. All of the senior notes are unsecured obligations of the Company and rank equally with the Company's other senior unsecured obligations.
See Note 9 for cash flow information on cash paid for amounts included in the measurement of lease liabilities and leased assets obtained in exchange for new operating lease liabilities for the years ended December 31, 2024, 2023 and 2022.
See Note 9 for cash flow information on cash paid for amounts included in the measurement of lease liabilities and leased assets obtained in exchange for new operating lease liabilities for the years ended December 31, 2025, 2024 and 2023.
Shares Reissued from Treasury Stock For each of the years ended December 31, 2024, 2023 and 2022, the Company reissued 1 million, 2 million and 2 million shares, respectively, from treasury stock for shares issued under the Employee Stock Purchase Plan ("ESPP") and stock-based compensation program.
Shares Reissued from Treasury Stock For each of the years ended December 31, 2025, 2024 and 2023, the Company reissued 2 million, 1 million and 2 million shares, respectively, from treasury stock for shares issued under the Employee Stock Purchase Plan ("ESPP") and stock-based compensation program.
Our senior unsecured revolving credit facility is also subject to certain financial covenants and limitations on indebtedness. As of December 31, 2024, we were in compliance with all such applicable financial covenants.
Our senior unsecured revolving credit facility is also subject to certain financial covenants and limitations on indebtedness. As of December 31, 2025, we were in compliance with all such applicable financial covenants.
For performance share units, the actual amount of shares earned is based on the achievement of the performance goals specified in the awards. The performance goals for awards granted in 2022, 2023 and 2024 were based on the financial performance of the Company, as well as relative TSR.
For performance share units, the actual amount of shares earned is based on the achievement of the performance goals specified in the awards. The performance goals for awards granted in 2023, 2024 and 2025 were based on the financial performance of the Company, as well as relative TSR.
Reserves for general and professional liability claims As a general matter, providers of diagnostic information services may be subject to lawsuits alleging negligence or other similar claims. These suits could involve claims for substantial damages. Any professional liability litigation could also 63 Table of Contents have an adverse impact on our client base and reputation.
Reserves for general and professional liability claims As a general matter, providers of diagnostic information services may be subject to lawsuits alleging negligence or other similar claims. These suits could involve claims for substantial damages. Any professional liability litigation could also have an adverse impact on our client base and reputation.
Substantially all of the accounts receivable due from healthcare insurers represent amounts billed under fee-for-service arrangements. Collection of our net revenues from healthcare insurers is normally a function of providing complete and correct 62 Table of Contents billing information to the healthcare insurers within the various filing deadlines and generally occurs within 30 to 60 days of billing.
Substantially all of the accounts receivable due from healthcare insurers represent amounts billed under fee-for-service arrangements. Collection of our net revenues from healthcare insurers is normally a function of providing complete and correct billing information to the healthcare insurers within the various filing deadlines and generally occurs within 30 to 60 days of billing.
Equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) with readily determinable fair values are measured at fair value in prepaid expenses and other current assets in our consolidated balance sheet with changes in fair value recorded in 70 Table of Contents current earnings in our consolidated statement of operations.
Equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) with readily determinable fair values are measured at fair value in prepaid expenses and other current assets in our consolidated balance sheet with changes in fair value recorded in current earnings in our consolidated statement of operations.
For the year ended December 31, 2024, the Company performed a qualitative impairment test and, based on the totality of information available for the reporting units, the Company concluded that it was more likely than not that the estimated fair values of the reporting units were greater than the carrying values of the reporting units and, as such, no further analysis was required.
For the years ended December 31, 2025 and 2024, the Company performed a qualitative impairment test and, based on the totality of information available for the reporting units, the Company concluded that it was more likely than not that the estimated fair values of the reporting units were greater than the carrying values of the reporting units and, as such, no further analysis was required.
We perform our annual impairment test during the fourth quarter of the fiscal year. For the year ended December 31, 2024, we performed a qualitative assessment for our DIS and risk assessment services reporting units.
We perform our annual impairment test during the fourth quarter of the fiscal year. For the year ended December 31, 2025, we performed a qualitative assessment for our DIS and risk assessment services reporting units.
The portfolios determined using the portfolio approach consist of the following payer customers: • Healthcare Insurers/Health Plans • Government Payers • Client Payers 61 Table of Contents • Patients We have a standardized approach to estimate the amount of consideration that we expect to be entitled to, including the impact of contractual allowances (including payer denials), and patient price concessions.
The portfolios determined using the portfolio approach consist of the following payer customers: • Healthcare Insurers/Health Plans • Government Payers • Client Payers • Patients We have a standardized approach to estimate the amount of consideration that we expect to be entitled to, including the impact of contractual allowances (including payer denials), and patient price concessions.
If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting 64 Table of Contents unit is less than its carrying value, then we are required to perform the quantitative goodwill impairment test. Otherwise, no further analysis is required.
If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then we are required to perform the quantitative goodwill impairment test. Otherwise, no further analysis is required.
The preliminary fair values of the acquired intangible assets are as follows: F-23 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) LifeLabs Laboratory Business of Three Physician Groups in New York Select Assets of the Outreach Laboratory Services Business of Allina Health Select Assets of the Outreach Laboratory Services Business of OhioHealth Outreach Laboratory Services Business of University Hospitals Other Acquisitions (a) Total Weighted Average Useful Life (in years) Customer-related $ 335 $ 57 $ 55 $ 54 $ 43 $ 95 $ 639 15 - 25 Trade names 99 — — — — — 99 15 Non-competition agreements — — — — 15 — 15 5 $ 434 $ 57 $ 55 $ 54 $ 58 $ 95 $ 753 (a) Principally relates to the acquisitions of Lenco and PathAI Diagnostics. 2023 Acquisitions During 2023, the Company completed acquisitions for an aggregate purchase price of $699 million (including contingent consideration initially estimated at $88 million), net of cash acquired, including the acquisitions discussed below.
The fair values of the acquired intangible assets during the year ended December 31, 2024 are as follows: F-22 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) LifeLabs Laboratory Business of Three Physician Groups in New York Select Assets of the Outreach Laboratory Services Business of Allina Health Select Assets of the Outreach Laboratory Services Business of OhioHealth Outreach Laboratory Services Business of University Hospitals Other Acquisitions (a) Total Weighted Average Useful Life (in years) Customer-related $ 335 $ 57 $ 55 $ 54 $ 43 $ 95 $ 639 15 - 25 Trade names 99 — — — — — 99 15 Non-competition agreements — — — — 15 — 15 5 $ 434 $ 57 $ 55 $ 54 $ 58 $ 95 $ 753 (a) Principally relates to the acquisitions of Lenco and PathAI Diagnostics. 2023 Acquisitions During 2023, the Company completed acquisitions for an aggregate purchase price of $699 million (including contingent consideration initially estimated at $88 million), net of cash acquired, including the acquisitions discussed below.
The portion of the Company's accounts receivable due from patients comprises the largest portion of credit risk. As of both December 31, 2024 and 2023, receivables due from patients represented approximately 20% of the Company's consolidated net accounts receivable.
The portion of the Company's accounts receivable due from patients comprises the largest portion of credit risk. As of both December 31, 2025 and 2024, receivables due from patients represented approximately 20% of the Company's consolidated net accounts receivable.
The Internal Revenue Service has either completed its examinations of the Company's consolidated federal income tax returns or the statute of limitations has expired up through and including the 2020 tax year.
The Internal Revenue Service has either completed its examinations of the Company's consolidated federal income tax returns or the statute of limitations has expired up through and including the 2021 tax year.
If any capitated payments are not received on a timely basis, we determine the cause and make a separate determination as to whether or not the collection of the amount from the healthcare insurer is at risk and, if so, would reserve accordingly.
If any capitated 63 Table of Contents payments are not received on a timely basis, we determine the cause and make a separate determination as to whether or not the collection of the amount from the healthcare insurer is at risk and, if so, would reserve accordingly.
TAXES ON INCOME The Company's pre-tax income before equity in earnings of equity method investees consisted of approximately $1.1 billion, $1.1 billion and $1.2 billion from U.S. operations and pre-tax income of $28 million, $7 million and $2 million from foreign operations for the years ended December 31, 2024, 2023 and 2022, respectively.
TAXES ON INCOME The Company's pre-tax income before equity in earnings of equity method investees consisted of approximately $1.2 billion, $1.1 billion and $1.1 billion from U.S. operations and pre-tax income of $96 million, $28 million and $7 million from foreign operations for the years ended December 31, 2025, 2024 and 2023, respectively.
F-29 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) The total amount of unrecognized tax benefits as of and for the years ended December 31, 2024, 2023 and 2022 consisted of the following: 2024 2023 2022 Balance, beginning of year $ 90 $ 94 $ 110 Additions: For tax positions of current year 2 1 1 For tax positions of prior years 9 15 18 Reductions: Changes in judgment — (6) (7) Expirations of statutes of limitations (5) (4) (4) Settlements — (10) (24) Other: Foreign deferred tax assets reduction 28 — — Balance, end of year $ 124 $ 90 $ 94 The contingent liabilities for tax positions primarily relate to uncertainties associated with the realization of tax benefits derived from the allocation of income and expense among state jurisdictions, the characterization and timing of certain tax deductions associated with business combinations, certain tax credits and the deductibility of certain expenses and settlement payments.
F-28 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) The total amount of unrecognized tax benefits as of and for the years ended December 31, 2025, 2024 and 2023 consisted of the following: 2025 2024 2023 Balance, beginning of year $ 124 $ 90 $ 94 Additions: For tax positions of current year 1 2 1 For tax positions of prior years 9 9 15 Reductions: Changes in judgment (4) — (6) Expirations of statutes of limitations (6) (5) (4) Settlements (4) — (10) Other: Foreign deferred tax assets reduction — 28 — Balance, end of year $ 120 $ 124 $ 90 The contingent liabilities for tax positions primarily relate to uncertainties associated with the realization of tax benefits derived from the allocation of income and expense among state jurisdictions, the characterization and timing of certain tax deductions associated with business combinations, certain tax credits and the deductibility of certain expenses and settlement payments.
Reserves for general and professional liabilities claims matters, including those associated with both asserted and incurred but not reported claims, are established on an undiscounted basis by considering actuarially determined losses based upon the Company's historical and projected loss experience. Such reserves totaled $169 million and $173 million as of December 31, 2024 and December 31, 2023, respectively.
Reserves for general and professional liabilities claims matters, including those associated with both asserted and incurred but not reported claims, are established on an undiscounted basis by considering actuarially determined losses based upon the Company's historical and projected loss experience. Such reserves totaled $178 million and $169 million as of December 31, 2025 and December 31, 2024, respectively.
The carrying value of these investments was $37 million and $18 million as of December 31, 2024 and 2023, respectively. Such amounts were included in other assets in the consolidated balance sheet. • Available-for-sale debt securities of privately-held companies. These investments are measured at fair value with unrealized gains and losses presented in other comprehensive (loss) income.
The carrying value of these investments was $47 million and $37 million as of December 31, 2025 and 2024, respectively. Such amounts were included in other assets in the consolidated balance sheet. • Available-for-sale debt securities of privately-held companies. These investments are measured at fair value with unrealized gains and losses presented in other comprehensive income (loss).
Further adjustments to the allowances, based on actual receipts, may be recorded upon settlement. We regularly assess the state of our billing operations in order to identify issues which may impact the collectability of receivables or revenue estimates.
Further adjustments to the allowances, based on actual receipts, may be recorded upon settlement. 62 Table of Contents We regularly assess the state of our billing operations in order to identify issues which may impact the collectability of receivables or revenue estimates.
During the years ended December 31, 2024, 2023 and 2022, $263 million, $222 million and $83 million, respectively, were purchased under noncancelable commitments. Billing and Collection Agreement In September 2016, the Company entered into a ten-year agreement with a third party to outsource its billing and related operations for the majority of the Company’s revenues.
During the years ended December 31, 2025, 2024 and 2023, $252 million, $263 million and $222 million, respectively, were purchased under noncancelable commitments. Billing and Collection Agreement In September 2016, the Company entered into a ten-year agreement with a third party to outsource its billing and related operations for the majority of the Company’s revenues.
Based on this assessment, management has determined that the Company's internal control over financial reporting as of December 31, 2024 is effective.
Based on this assessment, management has determined that the Company's internal control over financial reporting as of December 31, 2025 is effective.
The pro forma information includes adjustments primarily related to the amortization of acquired intangible assets (see below), interest expense associated with debt of LifeLabs which was extinguished prior to the acquisition, interest expense associated with senior notes issued to fund the acquisition (see Note 13), the impact on depreciation expense of recording acquired property, plant and equipment at fair value (see below), and transaction costs related to the LifeLabs acquisition.
The pro forma information includes adjustments primarily related to the amortization of acquired intangible assets, interest expense associated with debt of LifeLabs which was extinguished prior to the acquisition, interest expense associated with senior notes issued to fund the acquisition, the impact on depreciation expense of recording acquired property, plant and equipment at fair value, and transaction costs related to the LifeLabs acquisition.
F-31 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) 10.
F-30 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) 10.
F-38 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) 15.
F-37 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) 15.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
F-1 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In support of its risk management program, to ensure the Company’s performance or payment to third parties, $73 million in letters of credit under the Secured Receivables Credit Facility were outstanding as of December 31, 2024. The letters of credit primarily represent collateral for current and future automobile liability and workers’ compensation loss payments.
In support of its risk management program, to ensure the Company’s performance or payment to third parties, $78 million in letters of credit under the Secured Receivables Credit Facility were outstanding as of December 31, 2025. The letters of credit primarily represent collateral for current and future automobile liability and workers’ compensation loss payments.
During each of the four quarters of 2023, the Company's Board of Directors declared a quarterly cash dividend of $0.71 per common share. During each of the four quarters of 2022, the Company's Board of Directors declared a quarterly cash dividend of $0.66 per common share.
During each of the four quarters of 2023, the Company's Board of Directors declared a quarterly cash dividend of $0.71 per common share.
Reserves for legal matters totaled $4 million and $6 million as of December 31, 2024 and December 31, 2023, respectively. Reserves for General and Professional Liability Claims As a general matter, providers of clinical testing services may be subject to lawsuits alleging negligence or other similar legal claims. These suits could involve claims for substantial damages.
Reserves for legal matters totaled $20 million and $4 million as of December 31, 2025 and December 31, 2024, respectively. Reserves for General and Professional Liability Claims As a general matter, providers of clinical testing services may be subject to lawsuits alleging negligence or other similar legal claims. These suits could involve claims for substantial damages.
These estimates include the impact of contractual allowances (including payer denials) and patient price concessions. The Company's consolidated accounts receivable, net of allowance for credit losses, balance as of December 31, 2024, was $1,304 million, of which a significant portion related to the DIS business.
These estimates include the impact of contractual allowances (including payer denials) and patient price concessions. The Company's consolidated accounts receivable, net of allowance for credit losses, balance as of December 31, 2025 was $1,408 million, of which a significant portion related to the DIS business.
As of December 31, 2024 and 2023, the Company had approximately $24 million and $17 million, respectively, accrued, net of the benefit of a federal and state deduction, for the payment of interest on uncertain tax positions. The recognition and measurement of certain tax benefits includes estimates and judgment by management and inherently involves subjectivity.
As of December 31, 2025 and 2024, the Company had approximately $28 million and $24 million, respectively, accrued, net of the benefit of a federal and state deduction, for the payment of interest on uncertain tax positions. The recognition and measurement of certain tax benefits includes estimates and judgment by management and inherently involves subjectivity.
In support of our risk management program, $73 million in letters of credit under the secured receivables credit facility were outstanding as of December 31, 2024. Our secured receivables credit facility is subject to customary affirmative and negative covenants, and certain financial covenants with respect to the receivables that comprise the borrowing base and secure the borrowings under the facility.
In support of our risk management program, $78 million in letters of credit under the secured receivables credit facility were outstanding as of December 31, 2025. Our secured receivables credit facility is subject to customary affirmative and negative covenants, and certain financial covenants with respect to the receivables that comprise the borrowing base and secure the borrowings under the facility.
We assess the valuation methodology based upon the relevance and availability of the data at the time we perform the valuation. The discounted cash flows analysis includes several unobservable inputs related to our own assumptions.
We assess the valuation methodology based upon the relevance and availability of the data at the time we perform the valuation. The discounted cash flows analysis 65 Table of Contents includes several unobservable inputs related to our own assumptions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

72 edited+20 added−11 removed104 unchanged
Biggest changeThe FDA has regulatory responsibility over, among other areas, instruments, software, test systems, collection kits, reagents and other devices used by clinical laboratories to perform diagnostic testing in the United States. We offer companion diagnostic testing services to pharmaceutical companies that are regulated by the FDA. A number of tests we develop internally are offered as LDTs.
Biggest changeSuch changes also could require us to modify our business objectives. Our business and operations could be adversely impacted by the FDA's approach to regulation. The FDA has regulatory responsibility over, among other areas, instruments, software, test systems, collection kits, reagents and other devices used by clinical laboratories to perform diagnostic testing in the United States.
(r) Development of tests by our competitors or others which we may not be able to license, or usage (or theft) of our technology or similar technologies or our trade secrets or other intellectual property by competitors, any of which could negatively affect our competitive position.
(r) Development of tests by our competitors or others which we may not be able to license, or usage (or theft) of our technology, similar technologies, our trade secrets or other intellectual property by competitors, any of which could negatively affect our competitive position.
Integration of acquisitions involves a number of risks including the diversion of management's attention to the assimilation of the operations of assets or businesses we have acquired, difficulties in the diligence and integration of operations and systems and the realization of potential operating synergies, or introduction of IT security vulnerabilities not adequately investigated during diligence or managed after acquisition, the integration and retention of the personnel of the acquired businesses and of our existing business, challenges in retaining the customers of the combined businesses, and potential adverse effects on operating results.
Integration of acquisitions involves a number of risks including the diversion of management's attention to the integration of the operations of assets or businesses we have acquired, difficulties in the diligence and integration of operations and systems and the realization of potential operating synergies, or introduction of IT security vulnerabilities not adequately investigated during diligence or managed after acquisition, the integration and retention of the personnel of the acquired businesses and of our existing business, challenges in retaining the customers of the combined businesses, and potential adverse effects on operating results.
Although the attacks we have experienced have not materially disrupted, interrupted, damaged or shutdown the Company's IT systems, or materially disrupted the Company's performance of its business, the mitigation or remediation efforts that we have undertaken, and may undertake in the future, require the attention of management and expenditures of resources, which can be significant.
Although the attacks we have experienced in the past have not materially disrupted, interrupted, damaged or shutdown the Company's IT systems, or materially disrupted the Company's performance of its business, the mitigation or remediation efforts that we have undertaken, and may undertake in the future, require the attention of management and expenditures of resources, which can be significant.
Our international operations increase our exposure to risks inherent in doing business in non-U.S. markets, which may vary by market and include: intellectual property legal protections and remedies; weak legal systems which may, among other things, affect our ability to enforce contractual rights; trade regulations and procedures and actions affecting approval, production, pricing, supply, reimbursement and marketing of products and services; existing and emerging data privacy regulations affecting the processing and transfer of personal data; new regulations relating to the use of AI; and challenges based on differing languages, cultures and unfamiliar practices.
Our international operations (including in Canada) increase our exposure to risks inherent in doing business in non-U.S. markets, which may vary by market and include: intellectual property legal protections and remedies; weak legal systems which may, among other things, affect our ability to enforce contractual rights; trade regulations and procedures and actions affecting approval, production, pricing, supply, reimbursement and marketing of products and services; existing and emerging data privacy regulations affecting the processing and transfer of personal data; new regulations relating to the use of AI; and challenges based on differing languages, cultures and unfamiliar practices.
Additionally, many of the third-party service providers we rely on use generative AI for a variety of purposes, which increases the risk that our sensitive and proprietary data, and the data of our patients and customers, could be inadvertently or maliciously exposed.
Additionally, many of the third-party service providers we rely on use AI for a variety of purposes, which increases the risk that our sensitive and proprietary data, and the data of our patients and customers, could be inadvertently or maliciously exposed.
External actors may develop and deploy viruses, other malicious software programs, ransomware attacks, distributed denial of service attacks or other attempts to harm or obtain unauthorized access to our systems, including through the use of AI and other emerging technologies.
External actors may develop and deploy viruses, other malicious software programs, ransomware attacks, distributed denial of service attacks or other attempts to harm or obtain unauthorized access to our systems, including through the increased use of AI and other emerging technologies.
These laws and regulations may be interpreted or applied by a prosecutorial, regulatory or judicial authority in a manner that could require us to make changes in our operations, including our pricing and/or billing practices.
These laws and regulations may be interpreted or applied by a governmental, prosecutorial, regulatory or judicial authority in a manner that could require us to make changes in our operations, including our pricing and/or billing practices.
If we fail to comply with applicable laws and regulations, or if we fail to maintain, renew or obtain necessary permits, licenses and approvals, we could suffer civil and criminal penalties, fines, exclusion from participation in governmental healthcare programs and the loss of various licenses, certificates and authorizations necessary to operate our business, as well as incur additional liabilities from third-party claims.
If we fail to comply with applicable laws and regulations, or if we fail to comply with settlement obligations, or if we fail to maintain, renew or obtain necessary permits, licenses and approvals, we could suffer civil and criminal penalties, fines, exclusion from participation in governmental healthcare programs and the loss of various licenses, certificates and authorizations necessary to operate our business, as well as incur additional liabilities from third-party claims.
The ability of our employees and consumers to access our facilities may be adversely impacted by the effects of extreme weather events and natural disasters, such as hurricanes, earthquakes, tropical storms, floods, fires, or other extreme weather conditions, including major winter storms, droughts and heat waves; public health emergencies and pandemics; geopolitical matters, hostilities or acts of terrorism or other activities.
The ability of our employees and consumers to access our facilities may be adversely impacted by the effects of extreme weather events and natural disasters, such as hurricanes, earthquakes, tropical storms, floods, fires, or other extreme weather conditions, including major winter storms, droughts and heat waves; public health emergencies and pandemics; geopolitical conflicts, hostilities or acts of terrorism or other activities.
Competitors also may offer new testing services that can be performed outside of a commercial clinical laboratory, such as point-of-care testing that can be administered by physicians in their offices, complex testing that can be performed by hospitals in their own laboratories, and home testing that can be carried out without requiring the services of outside providers.
Competitors also may offer new testing services that can be performed outside of a commercial clinical laboratory, such as point-of-care testing that can be administered by physicians in their offices, complex testing that can be performed by hospitals in their own laboratories, and home testing that can be carried out without requiring the services of providers like us.
Competitors also may offer new testing services that can be performed outside of a commercial clinical laboratory, such as point-of-care testing that can be administered by physicians in their offices, complex testing that can be performed by hospitals in their own laboratories, and home testing that can be carried out without requiring the services of outside providers.
Competitors also may offer new testing services that can be performed outside of a commercial clinical laboratory, such as point-of-care testing that can be administered by physicians in their offices, complex testing that can be performed by hospitals in their own laboratories, and home testing that can be carried out without requiring the services of providers like us.
(k) Inability to achieve expected benefits from our acquisitions of other businesses. (l) Inability to achieve additional benefits from our business performance tools and efficiency initiatives. (m) Adverse publicity and news coverage about the diagnostic information services industry or us.
(k) Inability to identify, consummate or achieve expected benefits from our acquisitions of other businesses. (l) Inability to achieve additional benefits from our business performance tools and efficiency initiatives. (m) Adverse publicity and news coverage about the diagnostic information services industry or us.
These events also may result in a decline in the number of patients who seek clinical testing services or in our employees' ability to perform their job duties. Any future public health emergencies or pandemics may negatively affect us, including through its impact on the labor force and supply chain.
These events also may result in a decline in the number of patients who seek clinical testing services or in our employees' ability to perform their job duties. 38 Table of Contents Any future public health emergencies or pandemics may negatively affect us, including through its impact on the labor force and supply chain.
Additionally, new technology that we deploy to automate processes, improve customer service, generate insights from lab and other data and stimulate innovation to improve operational efficiency, including the expanded use of AI, may further expose our IT systems to the risk of cyberattacks and may create the need for rapid modifications to our cybersecurity program.
Additionally, new technology that we deploy to automate processes, improve customer 36 Table of Contents service, generate insights from lab and other data and stimulate innovation to improve operational efficiency, including the expanded use of AI, may further expose our IT systems to the risk of cyberattacks and may create the need for rapid modifications to our cybersecurity program.
Inflationary pressures, along with the competition for labor, have also resulted in a rise of our labor costs, which include the costs of compensation, benefits, and recruiting and training new hires. Our ability to raise the prices and fees we charge for the services we provide is limited. Continuation of the current inflationary environment may adversely impact us.
Inflationary pressures, along with the competition for labor, have also resulted in a rise of our labor costs, which include the costs of compensation, benefits, and recruiting and training new hires. Our ability to raise the prices and fees we charge for the services we provide is limited. An inflationary environment may adversely impact us.
Other steps taken to reduce utilization and reimbursement include requirements to obtain diagnosis codes (which can be inconsistent between health plans and government payers) to obtain payment, increased documentation requirements, limiting the allowable number of tests or ordering frequency, expanded prior authorization programs and otherwise increasing payment denials.
Other steps taken to reduce utilization and reimbursement include requirements to obtain diagnosis codes (which can be inconsistent between health plans and government payers) to obtain payment, increased documentation requirements, 30 Table of Contents limiting the allowable number of tests or ordering frequency, expanded prior authorization programs and otherwise increasing payment denials.
Some health plans also are reviewing test coding, evaluating coverage decisions, requiring additional documentation for claims 30 Table of Contents payment and requiring preauthorization of certain testing. There are also an increasing number of patients enrolling in consumer driven products and high deductible plans that involve greater patient cost-sharing.
Some health plans also are reviewing test coding, evaluating coverage decisions, requiring additional documentation for claims payment and requiring preauthorization of certain testing. There are also an increasing number of patients enrolling in consumer driven products and high deductible plans that involve greater patient cost-sharing.
While we seek to conduct our business in compliance with all applicable laws, many of the laws and regulations applicable to us are vague or indefinite and have not been extensively interpreted by the courts, including, among other things, many of those relating to: • billing and reimbursement of clinical testing; • certification or licensure of clinical laboratories; • the anti-self-referral and anti-kickback laws and regulations; • the laws and regulations administered by the FDA; • the corporate practice of medicine; • operational, personnel and quality requirements intended to ensure that clinical testing services are accurate, reliable and timely; • physician fee splitting; • relationships with physicians and hospitals; • marketing to consumers; • protection and privacy of patient data and other personal information; • use of AI; • safety and health of laboratory employees; and • handling, transportation and disposal of medical specimens, infectious and hazardous waste and radioactive materials.
While we seek to conduct our business in compliance with all applicable laws, many of the laws and regulations applicable to us are vague or indefinite and have not been extensively interpreted by the courts, including, among other things, many of those relating to: • billing and reimbursement of clinical testing; • certification or licensure of clinical laboratories; • the anti-self-referral and anti-kickback laws and regulations; • the laws and regulations administered by the FDA; • the laws and regulations administered by foreign governments where we conduct clinical trials and operate outside of the United States; • the corporate practice of medicine; • operational, personnel and quality requirements intended to ensure that clinical testing services are accurate, reliable and timely; • physician fee splitting; • relationships with physicians and hospitals; • marketing to consumers; • protection and privacy of patient data and other personal information; • use of AI; • safety and health of laboratory employees; and • handling, transportation and disposal of medical specimens, infectious and hazardous waste and radioactive materials.
Our business could be negatively affected if we are unable to continue to strengthen our efficiency. 35 Table of Contents It is important that we continue to strengthen our efficiency to promote our competitive position and enable us to mitigate the impact on our profitability of steps taken by government payers and health insurers to reduce the utilization and reimbursement of diagnostic information services, and to partly offset pressures from the current inflationary environment, including labor and benefit cost increases, and reimbursement pressures.
Our business could be negatively affected if we are unable to continue to strengthen our efficiency. 35 Table of Contents It is important that we continue to strengthen our efficiency, including through the use of technology and automation, to promote our competitive position and enable us to mitigate the impact on our profitability of steps taken by government payers and health insurers to reduce the utilization and reimbursement of diagnostic information services, and to partly offset pressures from an inflationary environment, including labor and benefit cost increases, and reimbursement pressures.
In addition, third parties to whom we outsource certain of our services or functions, or with whom we interface, store or process confidential patient and employee data or other confidential information, as well as those third parties’ providers, are also subject to the risks outlined above.
In addition, third parties to whom we outsource certain of our services or functions, or with whom we interface, store or process confidential patient and employee data or other confidential information, as well as those third parties’ providers, have experienced and remain subject to the risks outlined above.
We plan selectively to enhance our business from time to time through business development activities, such as acquisitions, licensing arrangements, investments and alliances. However, these plans are subject to the availability of appropriate opportunities and competition from other companies seeking similar opportunities.
We plan selectively to enhance our business from time to time through business development activities, such as acquisitions, licensing arrangements, investments and alliances, including joint ventures. However, these plans are subject to 37 Table of Contents the availability of appropriate opportunities and competition from other companies seeking similar opportunities.
(p) Challenges with properly managing the development and use of AI. (q) Negative developments regarding intellectual property and other property rights that could prevent, limit or interfere with our ability to develop, perform or sell our tests or operate our business.
(p) Challenges, including the associated competitive pressures, with properly managing the development, implementation, oversight and use of AI. (q) Negative developments regarding intellectual property and other property rights that could prevent, limit or interfere with our ability to develop, perform or sell our tests or operate our business.
States have mandated that Medicaid beneficiaries enroll in private managed care arrangements. In addition, state budget pressures have encouraged states to consider several courses of action that may impact our business, such as delaying payments, reducing reimbursement, restricting coverage eligibility, denying claims and service coverage restrictions. Further, CMS has set goals for value-based reimbursement to be achieved by 2030.
In addition, state budget pressures have encouraged states to consider several courses of action that may impact our business, such as delaying payments, reducing reimbursement, restricting coverage eligibility, denying claims and service coverage restrictions. Further, CMS has set goals for value-based reimbursement to be achieved by 2030.
These proceedings also may result in substantial monetary damages and reputational harm. RISKS RELATED TO OUR INDEBTEDNESS Our outstanding debt may impair our financial and operating flexibility. As of December 31, 2024, we had approximately $6.2 billion of debt outstanding.
These proceedings also may result in substantial monetary damages and reputational harm. RISKS RELATED TO OUR INDEBTEDNESS Our outstanding debt may impair our financial and operating flexibility. As of December 31, 2025, we had approximately $5.7 billion of debt outstanding.
Our approach to corporate responsibility may not satisfy all our stakeholders. We regularly assess opportunities and risks related to corporate responsibility, which includes sustainability, social and governance matters. As part of this process, we make decisions related to these matters and may set goals and targets related to sustainability and social matters.
We regularly assess opportunities and risks related to corporate responsibility, which includes sustainability, social and governance matters. As part of this process, we make decisions related to these matters and may set goals and targets related to sustainability and social matters.
RISKS RELATED TO CHANGE IN PUBLIC POLICY AND THE REGULATORY AND LEGAL ENVIRONMENT Significant changes or developments in U.S. laws or policies, including changes in U.S. healthcare regulation, may have a material adverse effect on our business.
RISKS RELATED TO CHANGE IN PUBLIC POLICY AND THE REGULATORY AND LEGAL ENVIRONMENT Significant changes or developments in U.S. laws or policies, including changes in U.S. healthcare regulation, may have a material adverse effect on our business. The political environment impacting healthcare regulation in the United States continues to be uncertain.
Regardless of merit or eventual outcome, these types of investigations and related litigation can result in: • diversion of management time and attention; • expenditure of large amounts of cash on legal fees, costs and payment of damages; • increases to our administrative, billing or other operating costs; • limitations on our ability to continue some of our operations; • enforcement actions, fines and penalties or the assertion of private litigation claims and damages; • decreases to the amount of reimbursement related to diagnostic information services performed; • adverse effects to important business relationships with third parties; • decreased demand for our services; and/or 32 Table of Contents • injury to our reputation.
Regardless of merit or eventual outcome, these types of investigations and related litigation can result in: • diversion of management time and attention; • expenditure of large amounts of cash on legal fees, costs and payment of damages; • increases to our administrative, billing or other operating costs; • limitations on our ability to continue some of our operations; • enforcement actions, fines and penalties or the assertion of private litigation claims and damages; • decreases to the amount of reimbursement related to diagnostic information services performed; • adverse effects to important business relationships with third parties; • decreased demand for our services; and/or • injury to our reputation. 32 Table of Contents Changes in applicable laws and regulations may result in existing practices becoming more restricted, or subject our existing or proposed services to additional costs, delay, modification or withdrawal.
Acquisitions are not all the same (e.g., asset acquisitions differ from acquisitions of equity interests); different acquisitions offer different risks. Acquisitions may involve the integration of a separate company that has different systems, processes, policies and cultures.
Acquisitions are not all the same ( e.g. , asset acquisitions differ from acquisitions of equity interests); different acquisitions offer different risks and require different levels of effort to obtain regulatory clearance. Acquisitions may involve the integration of a separate company that has different systems, processes, policies and cultures.
Moreover, the success of any such effort may be affected by a number of factors, including our ability to properly assess and value the potential business 37 Table of Contents opportunity, and to integrate the new businesses, manage the costs related to any such integration and to retain key technical, professional or management personnel.
Moreover, the success of any such effort may be affected by a number of factors, including our ability to properly assess and value the potential business opportunity, obtain any necessary regulatory clearance (including due to antitrust concerns), integrate the new businesses and manage the costs related to any such integration, and retain key technical, professional or management personnel.
These challenges may affect our ability to transport specimens, receive equipment, supplies or materials, or otherwise provide our services in a timely manner or at a reasonable price.
These challenges may affect our ability to transport specimens, receive equipment, supplies or materials, or otherwise provide our services in a timely manner or at a reasonable price. In addition, labor shortages may affect our ability to achieve our staffing or productivity goals.
The process of combining acquisitions may be disruptive to our businesses and may cause an interruption of, or a loss of momentum in, such businesses as a result of the following difficulties, among others: • loss of key customers or employees; • difficulty and/or delays in standardizing information and other systems; • difficulty in consolidating facilities and infrastructure; • failure to maintain the quality or timeliness of services that our Company has historically provided; • failing to satisfy the performance requirements of the physicians associated with an acquired outreach business; • diversion of management's attention from the day-to-day business of our Company as a result of the need to deal with the foregoing disruptions and difficulties; and • the added costs of dealing with such disruptions.
The process of negotiating, completing and integrating acquisitions may be disruptive to our businesses (especially as transactions become increasingly complex) and may cause an interruption of, or a loss of momentum in, such businesses as a result of the following difficulties, among others: • loss of key customers or employees; • difficulty and/or delays in standardizing information and other systems; • difficulty in consolidating facilities and infrastructure; • failure to maintain the quality or timeliness of services and profitability that our Company has historically provided; • failing to satisfy the performance requirements of the physicians associated with an acquired outreach business; • regulatory delay or failure to develop, acquire licenses for, introduce, or commercialize newly-acquired tests, technology and services; • diversion of management's attention from the day-to-day business of our Company as a result of the need to deal with the foregoing disruptions and difficulties; and • the added costs of dealing with such disruptions.
Business,” “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K. 40 Table of Contents Item 1B. Unresolved Staff Comments There are no unresolved SEC comments that require disclosure.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K. 41 Table of Contents Item 1B. Unresolved Staff Comments There are no unresolved SEC comments that require disclosure.
(bb) The impact of healthcare data analysis on our industry and the ability of our Company to adapt to that impact. (cc) Failure to adequately operationalize appropriate controls around use of our data, including risk of non-compliance with privacy law requirements. (dd) Any future public health emergency or pandemic. (ee) The other factors that are discussed within “Item 1.
(bb) The impact of healthcare data analysis on our industry and the ability of our Company to adapt to that impact. (cc) Failure to adequately operationalize appropriate controls around use of our data, including risk of non-compliance with privacy law requirements. (dd) The other factors that are discussed within “Item 1. Business,” “Item 1A. Risk Factors” and “Item 7.
The clinical testing business is highly competitive, and if we fail to provide an appropriately priced level of service or otherwise fail to compete effectively it could have a material adverse effect on our revenues and profitability. The clinical testing business remains a fragmented and highly competitive industry.
We expect that the evolution of the healthcare industry will continue, and that industry change is likely to be extensive. The clinical testing business is highly competitive, and if we fail to provide an appropriately priced level of service or otherwise fail to compete effectively it could have a material adverse effect on our revenues and profitability.
For example, the incoming administration announced a planned advisory commission to reform federal government processes and reduce expenditures. Pressures on and uncertainty surrounding the U.S. federal government’s budget, and potential changes in budgetary priorities, could adversely affect the funding for individual programs, including Medicare and other government programs upon which our business depends.
There continues to be pressures on and uncertainty surrounding the U.S. federal government’s budget, and potential changes in budgetary priorities, which could adversely affect the funding for individual programs, including Medicare and other government programs upon which our business depends.
(e) Adverse actions by government or other third-party payers, including healthcare reform that focuses on reducing healthcare costs but does not recognize the value and importance to healthcare of clinical testing or innovative solutions, unilateral reduction of fee schedules payable to us, unilateral recoupment of amounts allegedly owed and competitive bidding.
(e) Adverse actions by government or other third-party payers, including healthcare reform that focuses on reducing healthcare costs but does not recognize the value and importance to healthcare of clinical testing or innovative solutions, unilateral reduction of fee schedules payable to us, unilateral recoupment of amounts allegedly owed and competitive bidding. 39 Table of Contents (f) The impact upon our testing volume and collected revenue or general or administrative expenses resulting from compliance with policies and requirements imposed by Medicare, Medicaid and other third-party payers.
Additionally, changes in legislation and regulations (including those related to taxation, trade and importation), economic and monetary policies, geopolitical matters, among other potential impacts, could adversely impact the global economy and our 31 Table of Contents operating results. The potential impact of new policies that may be implemented as a result of the new administration is currently uncertain.
Additionally, changes in legislation and regulations (including those related to taxation, trade and importation), economic and monetary policies, geopolitical matters, among other potential impacts, could adversely impact the global economy and our operating results.
(u) Increases in interest rates and negative changes in our credit ratings from Standard & Poor's, Moody's Investor Services or Fitch Ratings causing an unfavorable impact on our cost of or access to capital. (v) Inability to hire or retain qualified employees, including key senior management personnel, and maintain good relations with our employees.
(u) Increases in interest rates and negative changes in our credit ratings from Standard & Poor's, Moody's Investor Services or Fitch Ratings causing an unfavorable impact on our cost of or access to capital.
We may be unable to obtain, maintain or enforce our intellectual property rights and may be subject to intellectual property litigation that could adversely impact our business. We may be unable to obtain or maintain adequate patent or other proprietary rights for our solutions or services or to successfully enforce our proprietary rights.
We may be unable to obtain or maintain adequate patent or other proprietary rights for our solutions or services or to successfully enforce our proprietary rights.
For example, in February 2025, we committed to a multi-year project ("Project Nova") to modernize our "Order to Cash" business processes including related information technology infrastructure and underlying enabling technologies.
For example, in connection with Project Nova, we committed to a multi-year project to modernize our "Order to Cash" business processes, including the related information technology infrastructure and underlying enabling technologies. We are partnering with Epic, a third-party licensor, to assist in the implementation of Project Nova.
In addition, labor shortages may affect our ability to achieve our staffing or productivity goals. 38 Table of Contents The extent to which we may be impacted by future public health emergencies and pandemics will depend on many factors beyond our knowledge or control.
The extent to which we may be impacted by future public health emergencies and pandemics will depend on many factors beyond our knowledge or control.
Also, an increasing risk of civil unrest, political tensions, wars or other military conflicts may also impact the cybersecurity threat risk landscape. 36 Table of Contents Although the Company has robust security measures implemented, which are monitored and routinely tested both by internal resources and external parties, cybersecurity threats against us continue to evolve and may not be recognized until after an incident.
Although the Company has implemented robust security measures, which are monitored and routinely tested both by internal resources and external parties, cybersecurity threats and attacks against us continue to evolve and occur and may not be recognized until after an incident.
(h) Failure to efficiently integrate acquired businesses and to manage the costs related to any such integration, or to retain key technical, professional or management personnel. 39 Table of Contents (i) Denial, suspension or revocation of CLIA certification or other licenses for any of our clinical laboratories under the CLIA standards, revocation or suspension of the right to bill the Medicare and Medicaid programs or other adverse regulatory actions by federal, state and local agencies.
(i) Denial, suspension or revocation of CLIA certification or other licenses for any of our clinical laboratories under the CLIA standards, revocation or suspension of the right to bill the Medicare and Medicaid programs or other adverse regulatory actions by federal, state and local agencies.
The IT systems that we rely on may be subject to unauthorized tampering, cyberattack or other security breach. Our IT systems have been and are subject to potential cyberattacks, tampering or other security breaches.
Our IT systems have been and are subject to potential cyberattacks, tampering or other security breaches.
This technology, including generative AI, which is in its early stages of commercial implementation, presents a number of risks inherent in its use, including risks related to cybersecurity, privacy and data security and use practices. Additionally, AI technology can create accuracy issues and other outcomes that could harm our customers and negatively impact our reputation and our business.
This technology, including generative AI, which is in its early stages of broader commercial implementation, presents a number of risks inherent in its use, including risks related to cybersecurity, privacy and data security and use practices and our oversight of how we use AI.
In addition, over the last several years, the federal government has expanded its contracts with private health insurance plans for Medicare beneficiaries, called “Medicare Advantage” programs, and has encouraged such beneficiaries to switch from the traditional programs to the private programs. There has been growth of health insurance plans offering Medicare Advantage programs, and of beneficiary enrollment in these programs.
Medicaid reimbursement varies by state and is subject to administrative and billing requirements and budget pressures. In addition, over the last several years, the federal government has expanded its contracts with private health insurance plans for Medicare beneficiaries, called “Medicare Advantage” programs, and has encouraged such beneficiaries to switch from the traditional programs to the private programs.
We primarily compete with three types of clinical testing providers: other commercial clinical laboratories, including smaller regional and local commercial clinical laboratories and specialized advanced laboratories, hospital-affiliated laboratories and physician-office laboratories. We also compete with other providers, including anatomic pathology practices, large physician group practices and providers of consumer-initiated testing.
The clinical testing business remains a fragmented and highly competitive industry. We primarily compete with three types of clinical testing providers: other commercial clinical laboratories, including smaller regional and local commercial clinical laboratories and specialized advanced laboratories, hospital-affiliated laboratories and physician-office laboratories.
Hospitals and companies that directly or indirectly employ or manage physicians also present a competitive threat to our business. Hospitals generally maintain on-site laboratories to perform testing on their patients (inpatient or outpatient). In addition, many hospitals compete with commercial clinical laboratories for outreach (non-hospital patients) testing.
We also compete with other providers, including anatomic pathology practices, large physician group practices and providers of consumer-initiated testing. Hospitals and companies that directly or indirectly employ or manage physicians also present a competitive threat to our business. Hospitals generally maintain on-site laboratories to perform testing on their patients (inpatient or outpatient).
These issues can also arise as a result of failures by third parties with whom we do business and over which we have limited control. In the event of a data security breach, we may be subject to notification obligations, litigation and governmental investigation or sanctions, and may suffer reputational damage, which could have an adverse impact on our business.
In the event of a data security breach, we may be subject to notification obligations, litigation and governmental investigation or sanctions, and may suffer reputational damage, which could have an adverse impact on our business. Our approach to corporate responsibility may not satisfy all our stakeholders.
In addition, we believe that our overall relations with our employees are good. However, unfavorable labor environments, unionization activity, or a failure to comply with labor or employment laws could result in, among other things, labor unrest, strikes, work stoppages, slowdowns by the affected workers, fines and penalties.
However, unfavorable labor environments, unionization activity (including in non-U.S. markets), a failure to comply with labor or employment laws or reputational considerations triggered by any of the risks described in this Report could result in, among other things, labor unrest, strikes, work stoppages, slowdowns by the affected workers, fines, penalties and a loss of employees.
(w) Terrorist and other criminal activities, hurricanes, earthquakes or other natural disasters, geopolitical matters, public health emergencies and pandemics, which could affect our customers or suppliers, transportation or systems, or our facilities, and for which insurance may not adequately reimburse us.
(v) Inability to hire or retain qualified employees, including key senior management personnel, and maintain good relations with our employees. 40 Table of Contents (w) Terrorist and other criminal activities, hurricanes, earthquakes or other natural disasters, geopolitical hostilities or other global conflicts, public health emergencies and pandemics, which could affect our customers or suppliers, transportation or systems, or our facilities, and for which insurance may not adequately reimburse us.
(b) Increased pricing pressure from customers, including payers and patients, and changing relationships with customers, payers, suppliers or strategic partners. (c) A decline in economic conditions, including the impact of an inflationary environment. (d) Impact of changes in payment mix, including increased patient financial responsibility and any shift from fee-for-service to discounted, risk-sharing, capitated or bundled fee arrangements.
(d) Impact of changes in payment mix, including increased patient financial responsibility and any shift from fee-for-service to discounted, risk-sharing, capitated or bundled fee arrangements.
Congress reintroduced federal legislation in 2023 (the Saving Access to Laboratory Services Act), which would reform PAMA and create a true market-based CLFS. In addition, CMS has adopted policies limiting or excluding coverage for clinical tests that we perform.
Congress introduced legislation in 2025, the Results Act, which would reform PAMA and create a true market-based CLFS. In addition, CMS has adopted policies limiting or excluding coverage for clinical tests that we perform. We also provide physician services that are reimbursed by Medicare under a physician fee schedule, which is subject to adjustment on an annual basis.
Legislative provisions relating to healthcare fraud and abuse provide government enforcement personnel with substantial funding, powers, penalties and remedies to pursue suspected cases of fraud and abuse. 33 Table of Contents We are subject to numerous political (including geopolitical), legal, operational and other risks as a result of our international operations which could impact our business in many ways.
We are subject to numerous political (including geopolitical), legal, operational and other risks as a result of our international operations which could impact our business in many ways.
The formation of ACOs and their approach to contracts with healthcare providers also may increase competition to provide diagnostic information services. In addition, new players have recently started to provide clinical lab testing services ( e.g ., employers; government agencies). The diagnostic information services industry also is faced with changing technology and new product introductions.
In addition, new players have recently started to provide clinical lab testing services ( e.g ., employers; government agencies). The diagnostic information services industry also is faced with changing technology and new product introductions. Competitors may compete using advanced technol ogy, including technology that enables more convenient or cost-effective testing ( e.g. , technology enabled by AI).
We are subject to numerous legal and regulatory requirements governing our activities, and we may face substantial fines and penalties, and our business activities may be impacted, if we fail to comply.
The potential impact of any new policies or changes to existing policies that have been or may be implemented is currently uncertain. 31 Table of Contents We are subject to numerous legal and regulatory requirements governing our activities, and we may face substantial fines and penalties, and our business activities may be impacted, if we fail to comply.
Reimbursement for Medicare services also is subject to annual reduction under the Budget Control Act of 2011, and the Statutory Pay-As-You-Go Act of 2010. From time to time, the federal government has considered whether competitive bidding could be used to provide clinical testing services for Medicare beneficiaries while maintaining quality and access to care.
Reimbursement for Medicare services also is subject to annual reduction under the Budget Control Act of 2011, and the Statutory Pay-As-You-Go Act of 2010.
Further, our competitors may develop new testing services and other products relying on AI more rapidly or more successfully than us, which could hinder our ability to compete effectively and adversely affect our results of operations. Using AI successfully will require significant resources, including having the technical expertise required to develop, test and maintain AI-based testing services.
Additionally, AI technology can create accuracy issues and other outcomes that could harm our customers and negatively impact our reputation and our business. Further, our competitors may develop new testing services and other products relying on AI more rapidly or more successfully than us, which could hinder our ability to compete effectively and adversely affect our results of operations.
There has been a trend of hospitals acquiring physician practices, increasing the percentage of physician practices owned by hospitals. Increased hospital ownership of physician practices may enhance clinician ties to hospital-affiliated laboratories, even encouraging or requiring the practices they own to refer testing to the hospital's laboratory, strengthening their competitive position further.
Increased hospital ownership of physician practices may enhance clinician ties to hospital-affiliated laboratories, even encouraging or requiring the practices they own to refer testing to the hospital's laboratory, strengthening their competitive position further. The formation of ACOs and their approach to contracts with healthcare providers also may increase competition to provide diagnostic information services.
Our ability to achieve the goals we may set related to corporate responsibility matters are subject to numerous risks and uncertainties, many of which are outside of our control. Despite our efforts, we may not achieve our goals on the timetable we set or at all.
Some of our stockholders, employees, customers and patients may consider corporate responsibility factors in making investment, employment and service provider decisions. Our ability to achieve the goals we may set related to corporate responsibility matters are subject to numerous risks and uncertainties, many of which are outside of our control.
Hospitals may seek to leverage their relationships with community clinicians and encourage the clinicians to send their outreach testing to the hospital's laboratory. As a result of this affiliation between hospitals and community clinicians, we compete against hospital-affiliated laboratories primarily based on quality and scope of service as well as pricing.
As a result of this affiliation between hospitals and community clinicians, we compete against hospital-affiliated laboratories primarily based on quality and scope of service as well as pricing. There has been a trend of hospitals acquiring physician practices, increasing the percentage of physician practices owned by hospitals.
Our operations may be adversely impacted by the effects of natural disasters such as hurricanes and earthquakes, public health emergencies and pandemics, geopolitical matters, hostilities or acts of terrorism and other criminal activities. We operate facilities primarily across the United States, and consumers frequently visit our facilities in person.
Our contractual relationship with these companies could expose us to these legal or regulatory risks and reputational harm. Our operations may be adversely impacted by the effects of natural disasters such as hurricanes and earthquakes, public health emergencies and pandemics, geopolitical conflicts, hostilities or acts of terrorism and other criminal activities.
Competitors may compete using advanced technology, including technology that enables more convenient or cost-effective testing ( e.g. , technology enabled by AI). Digital pathology is an example of this. Competitors also may compete on the basis of new service offerings.
Digital pathology is an example of this. Competitors also may compete on the basis of new service offerings.
Additionally, certain of our stakeholders may not be satisfied with our decisions related to corporate responsibility matters, the goals we set, our progress towards these goals or the resulting outcomes. This could lead to negative perceptions of, or loss of support for, our business, difficulty recruiting or attracting new employees and our stock price being negatively impacted.
Despite our efforts, we may not achieve our goals on the timetable we set or at all. Additionally, certain of our stakeholders may not be satisfied with our decisions related to corporate responsibility matters, the goals we set, our progress towards these goals or the resulting outcomes.
We have a broad range of stakeholders, including our stockholders, employees, patients and communities we serve, some of whom increasingly focus on corporate responsibility considerations. In addition, some of our stockholders, employees and patients may consider corporate responsibility factors in making investment, employment and service provider decisions.
We have a broad range of stakeholders, including our stockholders, employees, customers, which include government entities, patients and communities we serve, some of whom increasingly focus on corporate responsibility considerations and many have different or conflicting expectations with respect to corporate responsibility and related matters.
As of May 6, 2024, the FDA announced it was phasing out its general enforcement discretion approach so that LDTs manufactured by a laboratory will generally fall under the same enforcement approach as medical devices. A number of advanced tests we develop internally are offered as LDTs.
In May 2024, the FDA announced it was phasing out its general enforcement discretion approach so that LDTs manufactured by a laboratory would generally fall under the same enforcement approach as medical devices. However, in March 2025, a U.S. District Court set aside and vacated the FDA’s LDT rule and the FDA did not appeal the court’s decision.
We believe that federal and state governments continue aggressive enforcement efforts against perceived healthcare fraud.
We believe that federal and state governments continue aggressive enforcement efforts against perceived healthcare fraud. Legislative provisions relating to healthcare fraud and abuse provide government enforcement personnel with substantial funding, powers, penalties and remedies to pursue suspected cases of fraud and abuse.
The current FDA policy to remove enforcement discretion and/or new legislation is expected to have a significant impact on the clinical laboratory testing industry, including regulating LDTs in new ways, while creating new avenues of opportunity and competition regarding clinical laboratory testing. New competitors may enter the industry, and competition may come in new forms.
This new legislation could include the regulation of LDTs in a manner that is different than the prior LDT rule, while creating new avenues of opportunity and competition in clinical laboratory testing. New competitors may enter the industry, and competition may come in new forms.
We expect that the evolution of the healthcare industry will continue, and that industry change is likely to be extensive. We also believe that health plans and consumers increasingly are focusing on driving better value in laboratory testing services. We expect that the evolution of the healthcare industry will continue, and that industry change is likely to be extensive.
We expect that the evolution of the healthcare industry will continue, and that industry change is likely to be extensive. In addition, the diagnostic information services industry is faced with potential changes in government regulations that could impact patient access to healthcare.
Unfortunately, as a result of a flawed implementation of PAMA, the data collected did not accurately represent the laboratory market as required under PAMA. Independent laboratories were overrepresented, and hospitals and physician office laboratories were underrepresented, making the first round of PAMA cuts too extreme. The three years of cuts exceeded the original 10-year savings projections.
Unfortunately, by relying on laboratory reported data alone in 2017, CMS did not receive comprehensive and representative data needed to set Medicare rates that reflected the commercial market, as required under PAMA. Independent laboratories were overrepresented, and hospitals and physician office laboratories were underrepresented, making the first round of PAMA cuts excessive.
International operations also require us to devote management resources to implement our controls and systems in new markets, and to comply with the U.S. Foreign Corrupt Practices Act and similar anti-corruption laws in non-U.S. jurisdictions.
These actions could also negatively impact our supply chain costs or availability of products we need to operate our business. The ongoing uncertainty with the current state of global trade policy magnifies these risks. Our international operations also require us to devote management resources to implement our controls and systems in new markets, and to comply with the U.S.
Removed
PAMA calls for further revision of the Medicare CLFS for years after 2020, based on future surveys of market rates. Congress has delayed cuts five times (2021 - 2025) and delayed 2019 reporting six times (2020 - 2025). Reimbursement rate reduction from 2026-28 is capped by PAMA at 15% annually.
Added
In addition, many hospitals compete with commercial clinical laboratories for outreach (non-hospital patients) testing. Hospitals may seek to leverage their relationships with community clinicians and encourage the clinicians to send their outreach testing to the hospital's laboratory.
Removed
We also provide physician services that are reimbursed by Medicare under a physician fee schedule, which is subject to adjustment on an annual basis. Medicaid reimbursement varies by state and is subject to administrative and billing requirements and budget pressures.
Added
The first three years of cuts greatly exceeded the original 10-year savings projections. Starting in 2020, Congress has repeatedly acted to delay PAMA implementation by delaying the next round of data reporting (2020-2026) and Medicare cuts (2021-2026). However, the structural flaws of PAMA still need to be addressed to mitigate future excessive cuts.
Removed
Congress also periodically considers cost-saving initiatives, which have included coinsurance for clinical testing services, co-payments for clinical testing and further laboratory physician fee schedule reductions.
Added
There has been growth of health insurance plans offering Medicare Advantage programs, and of beneficiary enrollment in these programs. States have mandated that Medicaid beneficiaries enroll in private managed care arrangements.
Removed
There is uncertainty surrounding potential changes to the regulatory environment in the United States, particularly as it relates to healthcare regulation and related programs, following the outcome of the U.S. Presidential election in November 2024, which may have a material adverse effect on our business.
Added
The services that we offer and our result of operations could be adversely affected by legislative, enforcement, regulatory and public policy changes at the federal or state level, many of which we cannot anticipate at this time.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAlthough no cybersecurity incident during the year ended December 31, 2024 resulted in an interruption of our operations, known losses of critical data or otherwise had a material impact on our strategy, financial condition or results of operations, the scope of any future incident cannot be predicted. See “Item 1A. Risk Factors” for more information.
Biggest changeAlthough no cybersecurity incident during the year ended December 31, 2025 resulted in an interruption of our operations, known losses of critical data or otherwise had a material impact on our strategy, financial condition or results of operations, the scope of any future incident cannot be predicted. See “Item 1A. Risk Factors” for more information.
The CISO has extensive experience working in the IT and services industry and is a subject matter expert in varied topics including cybersecurity, data integrity, IT risk, enterprise architecture, third-party risk, threat intelligence, incident response, and 41 Table of Contents regulatory compliance.
The CISO has extensive experience working in the IT and services industry and is a subject matter expert in varied topics including cybersecurity, data integrity, IT risk, enterprise architecture, third-party risk, threat intelligence, incident response, and 42 Table of Contents regulatory compliance.
The Cybersecurity Committee regularly reports on its activities to the Board to promote effective coordination and to ensure the entire Board remains apprised of the effectiveness of our cybersecurity risk management and our cybersecurity risk landscape, and also assesses how management is managing these risks. 42 Table of Contents
The Cybersecurity Committee regularly reports on its activities to the Board to promote effective coordination and to ensure the entire Board remains apprised of the effectiveness of our cybersecurity risk management and our cybersecurity risk landscape, and also assesses how management is managing these risks. 43 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(B) Includes: (1) shares delivered or attested to in satisfaction of the exercise price and/or tax withholding obligations by holders of stock options (granted under the Company's Amended and Restated Employee Long-Term Incentive Plan) who exercised options; and (2) shares withheld (under the terms of grants under the Amended and Restated Employee Long-Term Incentive Plan) to offset tax withholding obligations that occur upon the delivery of outstanding common shares underlying restricted share units and performance share units. 44 Table of Contents Performance Graph Set forth below is a line graph comparing the cumulative total shareholder return on Quest Diagnostics' common stock since December 31, 2019 based on the market price of the Company's common stock and assuming reinvestment of dividends, with the cumulative total shareholder return of companies on the Standard & Poor's (S&P) 500 Stock Index and the S&P 500 Health Care (Sector) Index.
Biggest change(B) Includes: (1) shares delivered or attested to in satisfaction of the exercise price and/or tax withholding obligations by holders of stock options (granted under the Company's Amended and Restated Employee Long-Term Incentive Plan) who exercised options; and (2) shares withheld (under the terms of grants under the Amended and Restated Employee Long-Term Incentive Plan) to offset tax withholding obligations that occur upon the delivery of outstanding common shares underlying restricted share units and performance share units.
The table below sets forth the information with respect to purchases made by or on behalf of the Company of its common stock during the fourth quarter of 2024.
The table below sets forth the information with respect to purchases made by or on behalf of the Company of its common stock during the fourth quarter of 2025.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed and traded on the New York Stock Exchange under the symbol “DGX.” As of January 31, 2025, we had approximately 1,991 record holders of our common stock; we believe that the number of beneficial holders of our common stock exceeds the number of record holders.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed and traded on the New York Stock Exchange under the symbol “DGX.” As of February 2, 2026, we had approximately 1,881 record holders of our common stock; we believe that the number of beneficial holders of our common stock exceeds the number of record holders.
Closing DGX Price Total Shareholder Return Performance Graph Values Date DGX S&P 500 S&P 500 Health Care (Sector) DGX S&P 500 S&P 500 Health Care (Sector) 12/31/2020 $ 119.17 14.04 % 18.40 % 13.45 % $ 114.04 $ 118.40 $ 113.45 12/31/2021 $ 173.01 47.86 % 28.71 % 26.13 % $ 168.61 $ 152.39 $ 143.09 12/30/2022 $ 156.44 (7.79) % (18.13) % (1.95) % $ 155.47 $ 124.76 $ 140.30 12/29/2023 $ 137.88 (10.05) % 26.29 % 2.06 % $ 139.85 $ 157.56 $ 143.19 12/31/2024 $ 150.86 11.77 % 25.02 % 2.58 % $ 156.31 $ 196.98 $ 146.88 Item 6 [Reserved]
Closing DGX Price Total Shareholder Return Performance Graph Values Date DGX S&P 500 S&P 500 Health Care (Sector) DGX S&P 500 S&P 500 Health Care (Sector) 12/31/2021 $ 173.01 47.86 % 28.71 % 26.13 % $ 147.86 $ 128.71 $ 126.13 12/30/2022 $ 156.44 (7.79) % (18.13) % (1.95) % $ 136.34 $ 105.37 $ 123.67 12/29/2023 $ 137.88 (10.05) % 26.29 % 2.06 % $ 122.64 $ 133.07 $ 126.22 12/31/2024 $ 150.86 11.77 % 25.02 % 2.58 % $ 137.07 $ 166.37 $ 129.48 12/31/2025 $ 173.53 17.20 % 17.88 % 14.60 % $ 160.65 $ 196.11 $ 148.37 Item 6 [Reserved]
ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) October 1, 2024 – October 31, 2024 Share Repurchase Program (A) 96,210 $ 155.90 96,210 $ 1,020,914 Employee Transactions (B) — $ — N/A N/A November 1, 2024 – November 30, 2024 Share Repurchase Program (A) 556,579 $ 159.62 556,579 $ 932,073 Employee Transactions (B) 689 $ 160.58 N/A N/A December 1, 2024 – December 31, 2024 Share Repurchase Program (A) 290,587 $ 158.85 290,587 $ 885,914 Employee Transactions (B) — $ — N/A N/A Total Share Repurchase Program (A) 943,376 $ 159.00 943,376 $ 885,914 Employee Transactions (B) 689 $ 160.58 N/A N/A (A) Since the share repurchase program's inception in May 2003, our Board of Directors has authorized $13 billion of share repurchases of our common stock.
ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) October 1, 2025 – October 31, 2025 Share Repurchase Program (A)(C) 450,702 $ 179.58 450,702 $ 654,985 Employee Transactions (B) — $ — N/A N/A November 1, 2025 – November 30, 2025 Share Repurchase Program (A)(C) 940,277 $ 185.12 940,277 $ 480,920 Employee Transactions (B) 8,938 $ 177.74 N/A N/A December 1, 2025 – December 31, 2025 Share Repurchase Program (A)(C) 246,212 $ 182.77 246,212 $ 435,921 Employee Transactions (B) 695 $ 183.04 N/A N/A Total Share Repurchase Program (A)(C) 1,637,191 $ 183.24 1,637,191 $ 435,921 Employee Transactions (B) 9,633 $ 178.12 N/A N/A (A) As of December 31, 2025, $0.4 billion remained available under our share repurchase authorization.
Removed
The share repurchase authorization has no set expiration or termination date.
Added
In February 2026, our Board of Directors increased the size of our share repurchase program by $1 billion to $1.4 billion. The share repurchase authorization has no set expiration or termination date. Since the share repurchase program's inception in May 2003, our Board of Directors has authorized $14 billion of share repurchases of our common stock.
Added
(C) Excludes excise taxes on share repurchases of $2 million in aggregate, which will be paid in 2026. 45 Table of Contents Performance Graph Set forth below is a line graph comparing the cumulative total shareholder return on Quest Diagnostics' common stock since December 31, 2020 based on the market price of the Company's common stock and assuming reinvestment of dividends, with the cumulative total shareholder return of companies on the Standard & Poor's (S&P) 500 Stock Index and the S&P 500 Health Care (Sector) Index.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeItem 7. Management's Discussion and Analysis of Financial Condition and Results of Operations See page 58 . 45 Table of Contents Item 7A. Quantitative and Qualitative Disclosures About Market Risk See Management's Discussion and Analysis of Financial Condition and Results of Operations. Item 8. Financial Statements and Supplementary Data See Item 15(a)1 and Item 15(a)2. Item 9.
Biggest changeItem 7. Management's Discussion and Analysis of Financial Condition and Results of Operations See page 59 . 46 Table of Contents Item 7A. Quantitative and Qualitative Disclosures About Market Risk See Management's Discussion and Analysis of Financial Condition and Results of Operations. Item 8. Financial Statements and Supplementary Data See Item 15(a)1 and Item 15(a)2. Item 9.

Other DGX 10-K year-over-year comparisons