AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Established national coverage and broad BLS participation support advantages in operating infrastructure and expertise. Relative cost superiority and exclusivity are not demonstrated.
durability · 2/4 · The infrastructure and scientific capabilities are accumulated assets, and recent Central Laboratory growth supports their continued usefulness. Intense competition and cancellable contracts limit demonstrated protection.
customer dependency · 2/4 · Extensive participation in approved drug programs indicates meaningful customer use, and organic growth provides indirect demand evidence. Neither establishes customer lock-in; internal alternatives and termination rights weaken dependence.
erosion resilience · 2/4 · Recent organic growth and efficiencies show resilience alongside existing reimbursement constraints. The limited observation period and intense competition leave long-term resistance to erosion mixed.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 1/4 · PAMA has already reduced Medicare reimbursement for many tests, providing direct evidence of adverse pricing outcomes. The passages do not quantify the net company-wide price effect or demonstrate offsetting discretionary price increases.
retention · 2/4 · Organic growth in 2025 and subsequent Dx and Central Laboratory growth provide indirect evidence of continued demand. They cannot isolate existing-customer retention from new business, and BLS termination rights constrain confidence.
margin resilience · 3/4 · Dx and BLS reported operating-margin improvements, while first-half consolidated operating income rose from $720.5 million to $832.4 million. Growth and efficiencies support demonstrated operating resilience, although this does not prove price-setting power.
contractual freedom · 1/4 · Government reimbursement limits and payer pressure constrain Dx terms. Fixed-price and capped contracts expose Labcorp to cost inflation; BLS scope-related adjustments provide some flexibility but do not establish broad unilateral repricing rights.
Predictability83
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 50.00
- Revenue growth volatility (pp)
- 10.71
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 3.27
Financial strength44
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 48.13
- netDebtEbitGrade
- 27.03
- interestCoverageGrade
- 47.08
- currentRatioGrade
- 53.92
- Debt / FCF (x)
- 4.63
- Net debt / operating income (x)
- 3.65
- Interest coverage (x)
- 6.18
- Current ratio (x)
- 1.42
Capital allocation83
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 8.11
- 3-year average dilution (%)
- -7.46
- 3-year average SBC / revenue (%)
- 0.95
- cashConversionGrade
- 100.00
Management69
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · First-half operating cash flow of $637.0 million funded $252.6 million of capital expenditures, but acquisitions and shareholder distributions exceeded the remaining cash generation. Borrowing increased and cash fell; net shares declined despite employee issuance. Returns on acquisitions and the additional $155 million commitment remain unproven.
incentive alignment · 3/4 · Actual annual payouts below target and completed performance-share payouts demonstrate an operating incentive structure. Performance shares use EPS, revenue and a relative TSR modifier, and directors face stock ownership requirements. Missing executive holdings and detailed hurdles limit assessment of alignment strength and potential metric incentives.
execution · 3/4 · Reported organic growth, improved Dx efficiency and BLS gains following ED strategic actions support strong execution from operating results, rather than management praise. Flat first-half operating cash flow despite higher earnings tempers the assessment; attribution to specific actions remains issuer-reported.
governance · 3/4 · Disclosed shareholder rights, independent committees, clawback and anti-hedging policies are supported by actual Audit Committee meetings and executive sessions. These establish substantive governance practices, without proving exceptional oversight effectiveness. The disclosed financial-statement correction warrants caution because its significance is not supplied.
Evidence
•national scale and local presence with access to testing within 10 miles of most households; In addition to the factors listed above, the Company believes that the operational and economic efficiencies provided by its integrated service and logistics network, large-scale automated testing, and ongoing introduction of new technologies will position the Company to compete effectively with other providers of laboratory services.
Business: national coverage, integrated logistics and automated testing · Filed 24/02/2026
Biopharma Laboratory Services Segment BLS serves pharmaceutical, biotechnology, and diagnostic companies worldwide and operates a global network with deep expertise across early development and clinical trial execution in multiple therapeutic areas.
Business: BLS global network and scientific expertise · Filed 24/02/2026
BLS supported approximately 85% of new drugs and therapeutic products approved by the FDA in 2025, including 81% of oncology‑related approvals, 86% of approvals submitted by biotechnology companies, and 84% of approvals submitted by leading and large pharmaceutical companies.
Business: BLS participation in 2025 FDA approvals · Filed 24/02/2026
Through its industry‑leading Central Laboratory business, BLS supports clinical trial activity in approximately 100 countries.
Business: Central Laboratory geographic coverage · Filed 24/02/2026
The 7.2% increase in revenues for the year ended December 31, 2025, as compared to the corresponding period in 2024, was primarily due to organic revenue of 4.4%, acquisitions, net of divestitures of 2.5%, and favorable foreign currency translation of 0.4%.
MD&A: 2025 organic and acquisition revenue growth · Filed 24/02/2026
Dx segment operating income was $522.6 for the three months ended June 30, 2026, an increase of $39.8 over operating income of $482.8 in the corresponding period of 2025, and Dx segment operating margin increased approximately 50 basis points year-over-year.
MD&A: second-quarter 2026 Dx operating results · Filed 05/08/2026
The increase in operating income and operating margin was due to organic growth and operating efficiencies.
MD&A: Dx organic growth and operating efficiencies · Filed 05/08/2026
The increase in operating margin was primarily due to organic growth in the Central Laboratory business and operating efficiencies from the strategic actions taken in ED.
MD&A: first-half BLS Central Laboratory growth and ED efficiencies · Filed 05/08/2026
PAMA has already reduced Medicare reimbursement rates for many tests, and further reductions are expected, although rate reductions are frozen for 2026 and capped at 15% per year for 2027-2029.
Risk factors: realized Medicare reimbursement cuts and statutory limits · Filed 24/02/2026
Ongoing efforts by payers to reduce reimbursement, tighten payment policies, and control utilization are expected to continue.
Risk factors: payer reimbursement and utilization pressure · Filed 24/02/2026
The commercial laboratory business is intensely competitive in terms of price, service, specialty offerings, and the type and number of commercial laboratories.
Risk factors: intense commercial laboratory competition · Filed 24/02/2026
Dx and BLS compete against a wide range of businesses, as well as in-house departments of pharmaceutical, biotechnology, medical device, and diagnostic companies, and, to a lesser extent, selected academic research centers, universities, and teaching hospitals.
Risk factors: competing businesses and internal laboratories · Filed 24/02/2026
Many BLS contracts may be terminated or reduced in scope, including for reasons such as safety issues, undesired product results, insufficient clinical trial or investigator enrollment, customer decisions to halt development, or failure to perform contractual obligations.
Risk factors: BLS contract termination and scope reduction · Filed 24/02/2026
Changes in government regulations, whether easing or tightening requirements and changes in government operations, including staff reductions and reorganization efforts, could reduce the demand for BLS’s services or make them less competitive.
Risk factors: regulatory changes affecting BLS demand · Filed 24/02/2026
Additionally, efforts to control drug and device costs, or changes in insurer reimbursement practices, may lead customers to reduce R&D spending, which could adversely affect BLS’s business.
Risk factors: potential customer R&D spending reductions · Filed 24/02/2026
The Company enters into fixed-price and capped fee-for-service contracts, bearing financial risk if costs exceed estimates or pricing is insufficient.
Risk factors: fixed-price and capped fee-for-service cost exposure · Filed 24/02/2026
These contracts generally take the form of fixed-price or fee-for-service arrangements subject to pricing adjustments based on changes in scope.
Revenue recognition: contract pricing and scope adjustments · Filed 24/02/2026
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In Millions, Except Per Share Data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenues $ 3,731.1 $ 3,527.3 $ 7,268.7 $ 6,872.4 Cost of revenues 2,619.1 2,481.1 5,142.9 4,878.2 Gross profit 1,112.0 1,046.2 2,125.8 1,994.2 Selling, general, and administrative expenses 577.2 579.3 1,128.2 1,125.3 Amortization of intangibles and other assets 78.1 68.3 153.7 137.9 Restructuring and other charges 5.1 4.1 11.5 10.5 Operating income 451.6 394.5 832.4 720.5 Other (expense) income: Interest expense (61.1) (57.1) (116.2) (113.1) Investment income 5.6 1.7 17.8 8.2 Equity method loss, net (6.2) (1.7) (11.3) (2.0) Other, net (3.5) (32.7) (16.6) (33.7) Earnings from operations before income taxes 386.4 304.7 706.1 579.9 Provision for income taxes 87.3 66.4 129.0 128.6 Net earnings 299.1 238.3 577.1 451.3 Less: Net earnings attributable to the noncontrolling interest (0.4) (0.4) (0.6) (0.6) Net earnings attributable to Labcorp Holdings Inc.
Unaudited statements of operations: first-half 2026 results · Filed 05/08/2026
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In Millions) (Unaudited) Six Months Ended June 30, 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 577.1 $ 451.3 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 352.3 337.1 Stock compensation 66.6 66.9 Operating lease right-of-use asset expense 97.1 99.4 Deferred income taxes 26.4 (12.2) Other, net 25.6 46.1 Change in assets and liabilities (net of effects of acquisitions and divestitures): Increase in accounts receivable (247.1) (139.9) (Increase) decrease in unbilled services (6.9) 4.8 Increase in supplies inventory (29.7) (3.5) Decrease in prepaid expenses and other 27.1 57.8 Decrease in accounts payable (150.4) (80.6) Decrease in unearned revenue (49.7) (8.7) Decrease in accrued expenses and other (51.4) (179.4) Net cash provided by operating activities 637.0 639.1 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (252.6) (203.9) Proceeds from sale of assets 9.7 2.4 Proceeds from sale or distribution of equity affiliates or other investments — 6.9 Purchase of equity affiliates or other investments (17.5) (172.0) Acquisition of businesses, net of cash acquired (427.9) (63.5) Net cash used for investing activities (688.3) (430.1) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from term loan 750.0 — Payments on senior notes (500.0) (1,000.0) Proceeds from revolving credit facilities — 64.8 Payments on revolving credit facilities — (64.8) Proceeds from accounts receivable securitization 175.0 225.0 Payments on accounts receivable securitization (150.0) — Net share settlement tax payments from issuance of stock to employees (46.1) (29.0) Net proceeds from issuance of stock to employees 34.7 25.7 Dividends paid (119.9) (121.5) Purchase of common stock (451.8) (200.0) Other, net (31.3) (7.3) Net cash used for financing activities (339.4) (1,107.1) Effect of exchange rate on changes in Cash and cash equivalents 0.2 26.7 Net decrease in Cash and cash equivalents (390.5) (871.4) Cash and cash equivalents at beginning of period 532.3 1,518.7 Cash and cash equivalents at end of period $ 141.8 $ 647.3 The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
Unaudited cash flows: operating cash, investment, financing and shareholder distributions · Filed 05/08/2026
The changes in the Company’s shares of Common Stock issued and outstanding are summarized below: Six Months Ended June 30, 2026 Beginning balance 82.2 Shares issued under employee stock plans 0.4 Shares repurchased (1.7) Ending balance 80.9 Share Repurchase Program The Company has entered and may continue to enter into Rule 10b5-1 plans from time to time to facilitate repurchases of its Common Stock.
Equity note: employee issuance and net share-count reduction · Filed 05/08/2026
LONG-TERM INCENTIVE (LTI) PERCENT OF TARGET LTI PERFORMANCE METRICS 60% – Performance Shares 70% – EPS Payouts of the 2023-2025 performance share cycle were 200% of Target for the NEOs who received awards in 2023.
Compensation discussion: performance-share weighting and realized cycle payout · Filed 10/04/2026
30% – Revenue Total Shareholder Return (25% Modifier) 20% – Restricted Stock Units Service During Vesting Period 20% – Non-qualified Stock Options Service During Vesting Period In addition to the three main elements of our compensation program, we also provide limited perquisites, severance benefits, and legacy post-retirement benefits as part of a standard and competitive compensation package.
Compensation discussion: revenue metric, relative TSR modifier and service-based awards · Filed 10/04/2026
In 2025, the CHC Committee approved annual incentive payouts to the NEOs who received payouts solely based on enterprise performance at 95.8% of target, which is consistent with our 2025 financial results, as discussed below in the section “2025 Company Performance Highlights,” on page 50.
Compensation discussion: approved 2025 enterprise incentive payouts · Filed 10/04/2026
Each non-employee director is required to acquire and maintain shares having a value equal to five times that of the annual cash retainer.
Director compensation: stock ownership requirement · Filed 10/04/2026
courier fleet orders in 2025 involving hybrid and electric vehicles • Earned an EcoVadis rating of Silver and for CDP Climate Change earned an A- overall rating and a supplier engagement rating of an A Corporate Governance • Annual election of directors by majority vote • Majority voting in uncontested director elections • All independent director nominees, other than our Chief Executive Officer • Independent Board Committees • A strong Lead Independent Director • Annual Board and Committee self-assessments • Shareholder right to call special meetings • Cap cash severance payments to executive officers under arrangements subject to the Company’s Cash Severance Policy at 2.99x the sum of the executive officer’s base salary and target annual incentive award • Annual “say-on-pay” advisory vote • Anti-Hedging, Clawback, and Anti-Pledging policies • Shareholder proxy access right • Robust director stock ownership guidelines • Active shareholder engagement • Shareholder right to act by written consent • Oversight of Company lobbying and political contributions • Regular executive sessions of independent Directors • Strategy and risk oversight by full Board and Committees PROXY SUMMARY 12 LABCORP HOLDINGS INC.
Proxy summary: disclosed governance policies and shareholder rights · Filed 10/04/2026
The Audit Committee, comprised entirely of non-employee directors, held nine meetings with Deloitte, the independent registered public accountant engaged for the fiscal year ended December 31, 2025, and held eight executive sessions with Deloitte, the Company’s Internal Audit Department, and the independent directors during 2025.
Audit Committee report: actual 2025 meetings and executive sessions · Filed 10/04/2026
☒ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Form 10-K cover: correction of previously issued financial statements · Filed 24/02/2026
BLS segment operating income was $262.9 for the six months ended June 30, 2026, an increase of $32.7 over operating income of $230.2 in the corresponding period of 2025, and BLS segment operating margin increased approximately 100 basis points year-over-year.
MD&A: first-half 2026 BLS operating income and margin · Filed 05/08/2026
Parkview Health Systems, Inc. Other Acquisitions Closed During the Six Months Ended June 30, 2026 Measurement Period Adjustments Amounts Acquired During the Six Months Ended June 30, 2026 Cash and cash equivalents $ — $ — $ 0.4 $ — $ 0.4 Accounts receivable — — 3.6 — 3.6 Property, plant, and equipment — — 2.8 — 2.8 Goodwill 117.5 77.5 68.1 (1.0) 262.1 Intangible assets 132.5 87.5 68.2 (13.1) 275.1 Total assets acquired 250.0 165.0 143.1 (14.1) 544.0 Accounts payable — — 2.5 — 2.5 Accrued expenses and other — — 1.7 — 1.7 Notes payable — — 0.9 — 0.9 Deferred tax liability — — 7.5 — 7.5 Lease liabilities — — 2.4 — 2.4 Total liabilities acquired — — 15.0 — 15.0 Net assets acquired 250.0 165.0 128.1 (14.1) 529.0 Contingent consideration (85.0) — (4.8) 14.1 (75.7) 2025 escrow payments — (5.0) (20.0) — (25.0) Cash paid for acquisitions $ 165.0 $ 160.0 $ 103.3 $ — $ 428.3 Intangible assets recognized from business acquisitions that closed during the six months ended June 30, 2026, including any related measurement period adjustments, and their weighted-average amortization periods were as follows: Amount Weighted-average Amortization Period (in Years) Customer relationships $ 239.3 15.0 Non-compete agreements 48.9 5.0 Total $ 288.2 On June 28, 2026, the Company entered into an agreement to acquire select assets of an outreach laboratory services business for a purchase price of approximately $155.0.
Acquisition note: preliminary allocations and additional acquisition commitment · Filed 05/08/2026
