Quest Diagnostics Revenue Rebound, Strategic Moves Fuel Outlook Confidence

Quest Diagnostics Inc (NYSE:DGX) reported on Tuesday that first-quarter 2025 sales of $2.65 billion, up 12.1% year over year, beat the consensus of $2.63 billion.

The diagnostic test provider reported quarterly adjusted earnings of $2.21 per share, up 8.3%, beating the consensus of $2.15.

“In the first quarter, we delivered strong revenue growth of approximately 12%, including nearly 2.5% in organic growth, as demand rebounded in March following weather impacts early in the quarter. Our growth was due to contributions from acquisitions and large enterprise accounts, demand for our advanced diagnostics portfolio, and expanded health plan access,” said Jim Davis, chairman, CEO and president. “We are reaffirming our revenue and adjusted EPS guidance for the full year 2025.” 

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Revenue per requisition increased by 0.3%, requisition volume increased 12.4% and organic requisition volume fell slightly by 0.9%.

Adjusted Operating income increased 16.3% to $406 million, while margin improved from 14.8% to 15.3%.

Outlook: Quest Diagnostics reaffirms 2025 guidance for revenue of $10.70 billion—$10.85 billion versus the consensus of $10.78 billion and adjusted EPS of $9.55-$9.80 compared to the consensus of $9.68.

In February, Quest agreed to acquire select assets of Fresenius Medical Care AG’s (NYSE:FMS) wholly owned Spectra Laboratories. Financial terms were not disclosed. The acquisition is expected to close in the second half of 2025. The transition of services is expected to be complete by early 2026.

In addition, under a separate agreement, Quest will provide comprehensive laboratory services related to end-stage kidney disease and specialized water testing for patients and providers served by dialysis centers operated by Fresenius Medical Care and its wholly owned and joint-venture partners in the U.S.

In February, GRAIL Inc. (NASDAQ:GRAL) and Quest Diagnostics announced the initial phase of a program to improve provider access to GRAIL’s Galleri multi-cancer early detection test.

Providers can now order the Galleri test directly from GRAIL through the Quest Diagnostics connectivity system that enables providers in the U.S. to order and receive reports of laboratory tests electronically through Quest’s Quanum laboratory portal and more than 900 electronic health record (EHR) systems. More than 500,000 providers used the Quest connectivity system last year.

William Blair writes, “At first glance, these results are in line with what we would expect from Quest — consistent and with little drama.”

“We remain comfortable with the 2025 guide, as Quest continues to benefit from prudent utilization assumptions, mix benefits, flattish unit pricing, a more favorable regulatory environment and plenty of acquisition targets,” analyst Andrew Brackmann noted.

The William Blair analyst added, “Beyond the favorable industry backdrop, we believe Quest should be well insulated from macroeconomic noise, with the overwhelming majority of revenue coming from the U.S. and what we think will be minimal (likely offset) impact from tariffs.” The analyst reiterated the Outperform rating.

DGX Price Action: Quest Diagnostics stock is up 7.83% to $174.53 at publication on Tuesday.

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