filings.toolsItem 1. FINANCIAL STATEMENTS
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Item 1. FINANCIAL STATEMENTS
LABCORP HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Millions)
(Unaudited)
| March 31, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 981.1 | $ | 532.3 | |||||||
| Accounts receivable, net | 2,288.6 | 2,103.8 | |||||||||
| Unbilled services, net | 161.9 | 156.9 | |||||||||
| Supplies inventory | 497.7 | 534.7 | |||||||||
| Prepaid expenses and other | 629.5 | 692.8 | |||||||||
| Total current assets | 4,558.8 | 4,020.5 | |||||||||
| Property, plant, and equipment, net | 3,065.5 | 3,081.5 | |||||||||
| Goodwill, net | 6,955.2 | 6,789.5 | |||||||||
| Intangible assets, net | 3,636.1 | 3,596.0 | |||||||||
| Joint venture partnerships and equity method investments | 146.6 | 153.9 | |||||||||
| Other assets, net | 724.9 | 751.3 | |||||||||
| Total assets | $ | 19,087.1 | $ | 18,392.7 | |||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 695.7 | $ | 840.8 | |||||||
| Accrued expenses and other | 851.9 | 847.8 | |||||||||
| Unearned revenue | 405.2 | 439.1 | |||||||||
| Short-term operating lease liabilities | 183.2 | 191.1 | |||||||||
| Short-term finance lease liabilities | 4.6 | 4.6 | |||||||||
| Short-term borrowings and current portion of long-term debt | 500.4 | 500.1 | |||||||||
| Total current liabilities | 2,641.0 | 2,823.5 | |||||||||
| Long-term debt | 5,833.7 | 5,084.6 | |||||||||
| Operating lease liabilities | 656.5 | 682.6 | |||||||||
| Finance lease liabilities | 62.2 | 63.0 | |||||||||
| Deferred income taxes and other tax liabilities | 456.4 | 454.5 | |||||||||
| Other liabilities | 691.8 | 647.8 | |||||||||
| Total liabilities | 10,341.6 | 9,756.0 | |||||||||
| Commitments and contingent liabilities | |||||||||||
| Noncontrolling interest | 16.9 | 16.9 | |||||||||
| Shareholders’ equity: | |||||||||||
| Common stock, 82.3 and 82.2 shares outstanding at March 31, 2026, and December 31, 2025, respectively | 7.4 | 7.5 | |||||||||
| Additional paid-in capital | — | — | |||||||||
| Retained earnings | 8,784.4 | 8,639.9 | |||||||||
| Accumulated other comprehensive loss | (63.2) | (27.6) | |||||||||
| Total shareholders’ equity | 8,728.6 | 8,619.8 | |||||||||
| Total liabilities and shareholders’ equity | $ | 19,087.1 | $ | 18,392.7 |
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
LABCORP HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Millions, Except Per Share Data)
(Unaudited)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Revenues | $ | 3,537.6 | $ | 3,345.1 | |||||||||||||||||||
| Cost of revenues | 2,523.8 | 2,397.1 | |||||||||||||||||||||
| Gross profit | 1,013.8 | 948.0 | |||||||||||||||||||||
| Selling, general, and administrative expenses | 551.0 | 546.0 | |||||||||||||||||||||
| Amortization of intangibles and other assets | 75.6 | 69.6 | |||||||||||||||||||||
| Restructuring and other charges | 6.4 | 6.4 | |||||||||||||||||||||
| Operating income | 380.8 | 326.0 | |||||||||||||||||||||
| Other (expense) income: | |||||||||||||||||||||||
| Interest expense | (55.1) | (56.0) | |||||||||||||||||||||
| Investment income | 12.2 | 6.5 | |||||||||||||||||||||
| Equity method loss, net | (5.1) | (0.3) | |||||||||||||||||||||
| Other, net | (13.1) | (1.0) | |||||||||||||||||||||
| Earnings from operations before income taxes | 319.7 | 275.2 | |||||||||||||||||||||
| Provision for income taxes | 41.7 | 62.2 | |||||||||||||||||||||
| Net earnings | 278.0 | 213.0 | |||||||||||||||||||||
| Less: Net earnings attributable to the noncontrolling interest | (0.2) | (0.2) | |||||||||||||||||||||
| Net earnings attributable to Labcorp Holdings Inc. | $ | 277.8 | $ | 212.8 | |||||||||||||||||||
| Earnings per share: | |||||||||||||||||||||||
| Basic earnings per share | $ | 3.37 | $ | 2.54 | |||||||||||||||||||
| Diluted earnings per share | $ | 3.35 | $ | 2.52 |
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
LABCORP HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In Millions)
(Unaudited)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Net earnings | $ | 278.0 | $ | 213.0 | |||||||||||||||||||
| Foreign currency translation adjustments | (36.0) | 69.7 | |||||||||||||||||||||
| Net benefit plan adjustments | 0.5 | 0.4 | |||||||||||||||||||||
| Other comprehensive (loss) earnings before tax | (35.5) | 70.1 | |||||||||||||||||||||
| Provision for income tax related to items of comprehensive earnings | (0.1) | (0.1) | |||||||||||||||||||||
| Other comprehensive (loss) earnings, net of tax | (35.6) | 70.0 | |||||||||||||||||||||
| Comprehensive earnings | 242.4 | 283.0 | |||||||||||||||||||||
| Less: Net earnings attributable to the noncontrolling interest | (0.2) | (0.2) | |||||||||||||||||||||
| Comprehensive earnings attributable to Labcorp Holdings Inc. | $ | 242.2 | $ | 282.8 |
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
LABCORP HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(In Millions)
(Unaudited)
| Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2024 | $ | 7.6 | $ | 2.8 | $ | 8,303.4 | $ | (261.6) | $ | 8,052.2 | |||||||||||||||||||||||||
| Net earnings attributable to Labcorp Holdings Inc. | — | — | 212.8 | — | 212.8 | ||||||||||||||||||||||||||||||
| Other comprehensive earnings, net of tax | — | — | — | 70.0 | 70.0 | ||||||||||||||||||||||||||||||
| Dividends declared | — | — | (60.6) | — | (60.6) | ||||||||||||||||||||||||||||||
| Issuance of common stock under employee stock plans | — | 25.7 | — | — | 25.7 | ||||||||||||||||||||||||||||||
| Net share settlement tax payments from issuance of stock to employees | — | (25.5) | — | — | (25.5) | ||||||||||||||||||||||||||||||
| Stock compensation | — | 32.8 | — | — | 32.8 | ||||||||||||||||||||||||||||||
| BALANCE AT MARCH 31, 2025 | $ | 7.6 | $ | 35.8 | $ | 8,455.6 | $ | (191.6) | $ | 8,307.4 | |||||||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2025 | $ | 7.5 | $ | — | $ | 8,639.9 | $ | (27.6) | $ | 8,619.8 | |||||||||||||||||||||||||
| Net earnings attributable to Labcorp Holdings Inc. | — | — | 277.8 | — | 277.8 | ||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | (35.6) | (35.6) | ||||||||||||||||||||||||||||||
| Dividends declared | — | — | (60.2) | — | (60.2) | ||||||||||||||||||||||||||||||
| Issuance of common stock under employee stock plans | — | 32.9 | — | — | 32.9 | ||||||||||||||||||||||||||||||
| Net share settlement tax payments from issuance of stock to employees | — | (39.8) | — | — | (39.8) | ||||||||||||||||||||||||||||||
| Stock compensation | — | 31.7 | — | — | 31.7 | ||||||||||||||||||||||||||||||
| Purchase of common stock | (0.1) | (24.8) | (73.1) | — | (98.0) | ||||||||||||||||||||||||||||||
| BALANCE AT MARCH 31, 2026 | $ | 7.4 | $ | — | $ | 8,784.4 | $ | (63.2) | $ | 8,728.6 | |||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
LABCORP HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
(Unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net earnings | $ | 278.0 | $ | 213.0 | |||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 173.3 | 166.8 | |||||||||
| Stock compensation | 31.7 | 32.8 | |||||||||
| Operating lease right-of-use asset expense | 48.0 | 48.6 | |||||||||
| Deferred income taxes | 2.0 | (6.1) | |||||||||
| Other, net | 11.4 | 8.1 | |||||||||
| Change in assets and liabilities (net of effects of acquisitions and divestitures): | |||||||||||
| Increase in accounts receivable | (187.9) | (170.8) | |||||||||
| (Increase) decrease in unbilled services | (6.2) | 3.9 | |||||||||
| Decrease in supplies inventory | 35.4 | 8.4 | |||||||||
| Decrease in prepaid expenses and other | 4.0 | 45.0 | |||||||||
| Decrease in accounts payable | (138.7) | (147.6) | |||||||||
| Decrease in unearned revenue | (32.1) | (8.9) | |||||||||
| Decrease in accrued expenses and other | (27.4) | (174.7) | |||||||||
| Net cash provided by operating activities | 191.5 | 18.5 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Capital expenditures | (121.0) | (126.0) | |||||||||
| Proceeds from sale of assets | 7.8 | 0.5 | |||||||||
| Purchase of equity affiliates or other investments | (6.7) | (157.0) | |||||||||
| Acquisition of businesses, net of cash acquired | (202.2) | (53.5) | |||||||||
| Net cash used for investing activities | (322.1) | (336.0) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Proceeds from term loan | 750.0 | — | |||||||||
| Payments on senior notes | — | (1,000.0) | |||||||||
| Proceeds from revolving credit facilities | — | 64.8 | |||||||||
| Payments on revolving credit facilities | — | (64.8) | |||||||||
| Proceeds from accounts receivable securitization | — | 225.0 | |||||||||
| Net share settlement tax payments from issuance of stock to employees | (39.8) | (25.5) | |||||||||
| Net proceeds from issuance of stock to employees | 32.9 | 25.7 | |||||||||
| Dividends paid | (61.2) | (61.6) | |||||||||
| Purchase of common stock | (98.0) | — | |||||||||
| Other, net | (3.4) | (3.3) | |||||||||
| Net cash provided by (used for) financing activities | 580.5 | (839.7) | |||||||||
| Effect of exchange rate on changes in Cash and cash equivalents | (1.1) | 7.9 | |||||||||
| Net increase (decrease) in Cash and cash equivalents | 448.8 | (1,149.3) | |||||||||
| Cash and cash equivalents at beginning of period | 532.3 | 1,518.7 | |||||||||
| Cash and cash equivalents at end of period | $ | 981.1 | $ | 369.4 |
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
LABCORP HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and Shares in Millions, Except Per Share Data)
(Unaudited)
1. BASIS OF FINANCIAL STATEMENT PRESENTATION
Labcorp® Holdings Inc. (Labcorp, LHI, or the Company) is a global leader of innovative and comprehensive laboratory services that provides vital information to help doctors, hospitals, pharmaceutical companies, researchers, and patients make clear and confident decisions. By leveraging its unparalleled diagnostics and drug development capabilities, the Company provides insights and accelerates innovations to improve health and improve lives.
The Company reports its business in two segments, Diagnostics Laboratories and Biopharma Laboratory Services. During each of the three months ended March 31, 2026, and 2025, Dx and BLS contributed approximately 78% and 22%, respectively, of Revenues to the Company.
The accompanying Condensed Consolidated Financial Statements of the Company are unaudited. In the opinion of management, all adjustments necessary for a fair statement of results of operations, cash flows, and financial position have been made. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. Interim results are not necessarily indicative of results for a full year. The balance sheet for the year ended December 31, 2025 presented herein, was derived from the Company’s annual audited Consolidated Financial Statements but does not include all disclosures required by GAAP, which are contained within the Annual Report.
These unaudited Condensed Consolidated Financial Statements and notes are presented in accordance with the rules and regulations of the SEC and GAAP for interim reporting. As such, certain notes or other information that are normally required by the SEC or GAAP have been omitted if they substantially duplicate the disclosures contained in the Company’s annual audited Consolidated Financial Statements contained within its Annual Report. Accordingly, these Condensed Consolidated Financial Statements and notes should be read in conjunction with the Consolidated Financial Statements and notes thereto contained in the Company’s Annual Report.
These Condensed Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiaries for which it exercises control. Long-term investments in affiliated companies in which the Company exercises significant influence, but which it does not control, are accounted for using the equity method. The Company also has investments in other companies or investment funds that develop technology relating to the Company’s operations. Investments in which the Company does not exercise significant influence (generally, when the Company has an investment of less than 20% and no representation on the investee’s board of directors) are accounted for at fair value, or at cost minus impairment adjusted for observable price changes in orderly transactions for an identical or similar investment of the same issuer for those investments that do not have readily determinable fair values. The carrying value of these type of investments was $201.6 and $201.9 at March 31, 2026 and December 31, 2025, respectively, and is included within Other assets, net in the Company’s Condensed Consolidated Balance Sheets.
All significant intercompany transactions and accounts have been eliminated. The Company does not have any significant variable interest entities or special purpose entities whose financial results are not included in these Condensed Consolidated Financial Statements.
The financial statements of the Company’s operating foreign subsidiaries are measured using the local currency as the functional currency. Assets and liabilities are translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average monthly exchange rates prevailing during the period. Resulting translation adjustments are included in Accumulated other comprehensive loss within the Condensed Consolidated Balance Sheets.
Recent Accounting Pronouncements
In July 2025, the FASB issued ASU 2025-05, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This accounting pronouncement provides all entities with a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the assets when measuring credit losses. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025. This accounting pronouncement did not have a material impact on the Company’s Condensed Consolidated Financial Statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use-Software (Topic 350): Targeted Improvements to the Accounting for Internal-Use Software. This accounting pronouncement improves the operability of the existing guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027. The Company is currently assessing the impact that adopting this accounting pronouncement will have on its Condensed Consolidated Financial Statements.
LABCORP HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and Shares in Millions, Except Per Share Data)
(Unaudited)
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. This accounting pronouncement establishes guidance on the recognition, measurement, and presentation of government grants received by business entities. ASU 2025-10 is effective for fiscal years beginning after December 15, 2028. The Company is currently assessing the impact that adopting this accounting pronouncement will have on its Condensed Consolidated Financial Statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This accounting pronouncement is intended to improve the navigability of guidance in ASC 270, Interim Reporting, and clarify when it applies. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027. The Company is currently assessing the impact that adopting this accounting pronouncement will have on its future interim reporting.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements. This accounting pronouncement addresses suggestions received from stakeholders regarding the Accounting Standards Codification and makes other incremental improvements to GAAP that clarify, correct errors in, or make other improvements to a variety of topics that are intended to make it easier to understand and apply. ASU 2025-12 is effective for fiscal years beginning after December 15, 2026. The Company is currently assessing the impact that adopting this accounting pronouncement will have on its Condensed Consolidated Financial Statements.
2. REVENUES
The Company’s Revenues by segment and by payer group were as follows:
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| North America | Europe | Other | Total | North America | Europe | Other | Total | ||||||||||||||||||||||||||||||||||||||||
| Dx: | |||||||||||||||||||||||||||||||||||||||||||||||
| Clients | 23 | % | — | % | — | % | 23 | % | 24 | % | — | % | — | % | 24 | % | |||||||||||||||||||||||||||||||
| Patients | 10 | % | — | % | — | % | 10 | % | 10 | % | — | % | — | % | 10 | % | |||||||||||||||||||||||||||||||
| Medicare and Medicaid | 8 | % | — | % | — | % | 8 | % | 8 | % | — | % | — | % | 8 | % | |||||||||||||||||||||||||||||||
| Third party | 37 | % | — | % | — | % | 37 | % | 36 | % | — | % | — | % | 36 | % | |||||||||||||||||||||||||||||||
| Total Dx revenues | 78 | % | — | % | — | % | 78 | % | 78 | % | — | % | — | % | 78 | % | |||||||||||||||||||||||||||||||
| BLS: | |||||||||||||||||||||||||||||||||||||||||||||||
| Pharmaceutical, biotechnology, medical device, diagnostic companies, and CROs | 8 | % | 10 | % | 4 | % | 22 | % | 9 | % | 9 | % | 4 | % | 22 | % | |||||||||||||||||||||||||||||||
| Total Revenues | 86 | % | 10 | % | 4 | % | 100 | % | 87 | % | 9 | % | 4 | % | 100 | % | |||||||||||||||||||||||||||||||
Revenues in the U.S. were $2,914.0 (82.4%) and $2,813.8 (84.1%) for the three months ended March 31, 2026, and 2025, respectively.
Accounts Receivable, Unbilled Services, and Unearned Revenue
The following table provides information about accounts receivable and unbilled services from contracts with customers:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Dx accounts receivable | $ | 1,513.2 | $ | 1,349.0 | |||||||
| BLS accounts receivable | 808.4 | 791.2 | |||||||||
| Less: BLS allowance for credit losses | (33.0) | (36.4) | |||||||||
| Accounts receivable, net | $ | 2,288.6 | $ | 2,103.8 | |||||||
| Gross unbilled services | $ | 166.2 | $ | 164.0 | |||||||
| Less: BLS allowance for credit losses | (4.3) | (7.1) | |||||||||
| Unbilled services, net | $ | 161.9 | $ | 156.9 |
Revenues recognized during the period that were included in the unearned revenue balance at the beginning of the period were $58.3 and $68.9 for the three months ended March 31, 2026, and 2025, respectively.
LABCORP HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and Shares in Millions, Except Per Share Data)
(Unaudited)
Allowance for Credit Losses
BLS estimates future expected credit losses on Accounts receivable, net and Unbilled services, net over the remaining collection period of the instrument. The rollforward for the allowance for credit losses was as follows:
| Accounts Receivable, net | Unbilled Services, net | Total | |||||||||||||||
| Allowance for credit losses at December 31, 2025 | $ | 36.4 | $ | 7.1 | $ | 43.5 | |||||||||||
| Credit loss expense | (0.1) | — | (0.1) | ||||||||||||||
| Write-offs | (3.0) | (2.8) | (5.8) | ||||||||||||||
| Foreign currency impact | (0.3) | — | (0.3) | ||||||||||||||
| Allowance for credit losses at March 31, 2026 | $ | 33.0 | $ | 4.3 | $ | 37.3 |
3. BUSINESS ACQUISITIONS
During the three months ended March 31, 2026, the Company acquired various businesses and related assets for total consideration of $312.0. Total consideration includes cash payments and, as applicable, contingent consideration payable by the Company primarily upon the achievement of specified future performance targets of the acquired businesses. The preliminary purchase considerations for these acquisitions were allocated under the acquisition method of accounting to the estimated fair market value of the net assets acquired. A residual amount of tax-deductible goodwill, including measurement period adjustments relating to prior acquisitions, of $175.9 was recorded during the three months ended March 31, 2026. The purchase price allocations for these acquisitions were preliminary at March 31, 2026. The valuation of acquired assets and assumed liabilities included the following:
| Empire City Laboratories, Inc. | Other Acquisitions Closed During the Three Months Ended March 31, 2026 | Measurement Period Adjustments | Amounts Acquired During the Three Months Ended March 31, 2026 | |||||||||||||||||
| Property, plant, and equipment | $ | — | $ | 2.4 | $ | — | $ | 2.4 | ||||||||||||
| Goodwill | 117.5 | 29.1 | 29.3 | 175.9 | ||||||||||||||||
| Intangible assets | 132.5 | 32.9 | (29.3) | 136.1 | ||||||||||||||||
| Total assets acquired | 250.0 | 64.4 | — | 314.4 | ||||||||||||||||
| Other liabilities | — | 2.4 | — | 2.4 | ||||||||||||||||
| Total liabilities acquired | — | 2.4 | — | 2.4 | ||||||||||||||||
| Net assets acquired | 250.0 | 62.0 | — | 312.0 | ||||||||||||||||
| Contingent consideration | (85.0) | (4.8) | — | (89.8) | ||||||||||||||||
| 2025 escrow payment | — | (20.0) | — | (20.0) | ||||||||||||||||
| Cash paid for acquisitions | $ | 165.0 | $ | 37.2 | $ | — | $ | 202.2 |
Intangible assets recognized from business acquisitions that closed during the three months ended March 31, 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 | $ | 137.3 | 15.0 | ||||||||
| Non-compete agreements | 28.1 | 5.0 | |||||||||
| Total | $ | 165.4 |
On November 13, 2025, the Company announced that it entered into an agreement with Parkview Health System, Inc. to acquire select assets of the health system’s outreach laboratory services for a purchase price of approximately $165.0. The transaction is anticipated to close in 2026, subject to customary closing conditions and applicable regulatory approvals for a transaction of this type.
LABCORP HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and Shares in Millions, Except Per Share Data)
(Unaudited)
Unaudited Supplemental Pro Forma Information
If the aggregate of the Company’s 2026 and 2025 acquisitions, that were accounted for as business combinations, had been completed at January 1, 2025, the Company’s pro forma results would have been as follows:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Revenues | $ | 3,596.7 | $ | 3,410.2 | ||||||||||||||||||||||
| Net earnings attributable to LHI | $ | 286.7 | $ | 222.6 |
4. EARNINGS PER SHARE
Basic EPS is computed by dividing Net earnings attributable to Labcorp Holdings Inc. by the weighted-average number of common shares outstanding. Diluted EPS is computed by dividing Net earnings attributable to Labcorp Holdings Inc., and if applicable, including the impact of dilutive adjustments by the weighted-average number of common shares outstanding plus potentially dilutive shares, as if they had been issued at the earlier of the date of issuance or the beginning of the period presented. Potentially dilutive common shares result primarily from the Company’s outstanding stock options, restricted stock units, and/or performance share awards.
The following represents a reconciliation of Basic EPS to Diluted EPS:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic EPS | Dilutive Effect | Diluted EPS | Basic EPS | Dilutive Effect | Diluted EPS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net earnings attributable to LHI | $ | 277.8 | $ | 277.8 | $ | 212.8 | $ | 212.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weighted-average common shares outstanding | 82.3 | 0.6 | 82.9 | 83.6 | 0.7 | 84.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Per share amount | $ | 3.37 | $ | 3.35 | $ | 2.54 | $ | 2.52 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The following table summarizes the potential common shares not included in the computation of Diluted EPS because their impact would have been antidilutive:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Employee stock options and awards | 0.3 | 0.3 |
5. GOODWILL AND INTANGIBLE ASSETS
The balances, net of impairment, and changes in the carrying amount of goodwill were as follows:
| Dx | BLS | Total | |||||||||||||||||||||||||||||||||
| Beginning Balance at December 31, 2025 | $ | 5,434.8 | $ | 1,354.7 | $ | 6,789.5 | |||||||||||||||||||||||||||||
| Goodwill acquired, excluding measurement period adjustments | 146.6 | — | 146.6 | ||||||||||||||||||||||||||||||||
| Foreign currency impact and other adjustments to goodwill | 28.1 | (9.0) | 19.1 | ||||||||||||||||||||||||||||||||
| Ending Balance at March 31, 2026 | $ | 5,609.5 | $ | 1,345.7 | $ | 6,955.2 |
During the three months ended March 31, 2026 and 2025, the Company did not record a goodwill or intangible asset impairment charge.
The cumulative goodwill impairment for the Company as of March 31, 2026, and December 31, 2025, was $648.5 and primarily represents the goodwill of the Company’s ED reporting unit within the BLS segment.
LABCORP HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and Shares in Millions, Except Per Share Data)
(Unaudited)
The components of identifiable intangible assets were as follows:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Range of Useful Lives (in Years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Definite-lived intangible assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Customer relationships | 10 | - | 36 | $ | 4,615.8 | $ | (1,850.7) | $ | 2,765.1 | $ | 4,525.3 | $ | (1,816.3) | $ | 2,709.0 | |||||||||||||||||||||||||||||||||||||||||
| Patents, licenses, and technology | 3 | - | 15 | 546.8 | (344.5) | 202.3 | 548.7 | (337.5) | 211.2 | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-compete agreements | 3 | - | 5 | 221.3 | (114.7) | 106.6 | 213.5 | (108.0) | 105.5 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | 1 | - | 15 | 40.1 | (30.6) | 9.5 | 40.0 | (28.9) | 11.1 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total definite-lived intangible assets | $ | 5,424.0 | $ | (2,340.5) | $ | 3,083.5 | $ | 5,327.5 | $ | (2,290.7) | $ | 3,036.8 | ||||||||||||||||||||||||||||||||||||||||||||
| Indefinite-lived intangible assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Canadian and other licenses | $ | 552.6 | N/A | $ | 552.6 | $ | 559.2 | N/A | $ | 559.2 | ||||||||||||||||||||||||||||||||||||||||||||||
| Total intangible assets | $ | 5,976.6 | $ | (2,340.5) | $ | 3,636.1 | $ | 5,886.7 | $ | (2,290.7) | $ | 3,596.0 |
Amortization of intangible assets was $75.6 and $69.6 for the three months ended March 31, 2026, and 2025, respectively. The amortization expense of intangible assets is estimated to be $223.0 for the remainder of 2026, $287.8 in 2027, $280.2 in 2028, $267.0 in 2029, $258.7 in 2030, and $1,766.8 thereafter.
6. DEBT
Short-term borrowings and the current portion of long-term debt consisted of the following:
| March 31, 2026 | December 31, 2025 | ||||||||||
| 1.55% senior notes due 2026 | $ | 500.0 | $ | 500.0 | |||||||
| Debt issuance costs | — | (0.2) | |||||||||
| Current portion of note payable | 0.4 | 0.3 | |||||||||
| Total Short-term borrowings and current portion of long-term debt | $ | 500.4 | $ | 500.1 | |||||||
Long-term debt consisted of the following:
| March 31, 2026 | December 31, 2025 | ||||||||||
| 2026 Term Loan | $ | 750.0 | $ | — | |||||||
| 3.60% senior notes due 2027 | 600.0 | 600.0 | |||||||||
| 2.95% senior notes due 2029 | 650.0 | 650.0 | |||||||||
| 4.35% senior notes due 2030 | 650.0 | 650.0 | |||||||||
| 2.70% senior notes due 2031 | 446.2 | 447.3 | |||||||||
| 4.55% senior notes due 2032 | 500.0 | 500.0 | |||||||||
| 4.80% senior notes due 2034 | 850.0 | 850.0 | |||||||||
| 4.70% senior notes due 2045 | 900.0 | 900.0 | |||||||||
| Debt issuance costs | (37.5) | (37.7) | |||||||||
| AR Facility | 525.0 | 525.0 | |||||||||
| Total Long-term debt | $ | 5,833.7 | $ | 5,084.6 | |||||||
Credit Facilities
On March 20, 2026, the Company entered into the $750.0 2026 Term Loan that will mature on March 20, 2028, and anticipates using the proceeds to repay maturing short-term debt and for other corporate uses. The principal balance of the 2026 Term Loan bears interest at a floating per annum rate equal to, at the Company’s election, either (i) a SOFR-based rate plus a margin of 0.700% or (ii) a base rate plus a margin of 0.0%. As of March 31, 2026, the effective interest rate on the 2026 Term Loan was 4.39%.
The Company maintains a senior revolving credit facility, which was amended and restated on June 27, 2025. It consists of a five-year revolving facility in the principal amount of up to $1,000.0, with the option of increasing the facility by up to an additional $500.0, subject to certain conditions, including obtaining additional commitments from new or existing lenders. The revolving credit facility also provides for a subfacility of up to $100.0 for swing line borrowings and a subfacility of up to $150.0 for issuances of letters of credit. Borrowings under the revolving credit facility bear interest at a floating rate equal to either (i) a SOFR-based rate plus a margin ranging from 0.805% to 1.300% or (ii) a base rate plus a margin ranging from 0.0% to 0.300%, in each case depending on the Company’s long-term debt ratings. The Company is required to pay a facility fee
LABCORP HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and Shares in Millions, Except Per Share Data)
(Unaudited)
quarterly on the aggregate amount of commitments under the revolving credit facility, at a per annum rate ranging from 0.070% to 0.200%, depending on the Company’s long-term debt ratings, regardless of usage. The revolving credit facility is permitted to be used for general corporate purposes, including working capital, capital expenditures, funding of share repurchases and certain other payments, acquisitions, and other investments. At March 31, 2026, there were no balances outstanding on the Company’s current revolving credit facility and $107.4 in outstanding letters of credit on the Company’s subfacility. At March 31, 2026, the effective interest rate on the revolving credit facility was 4.67%. The revolving credit facility expires in June 2030.
On August 23, 2024, the Company and a SPV entered into a $300.0 three-year accounts receivable securitization facility with PNC Bank, National Association (PNC) as administrative agent. The AR Facility provides for purchases of accounts receivable by PNC in an amount of up to $300.0 through August 2027, and may increase up to $700.0, subject to the satisfaction of certain conditions.
On January 31, 2025, the Company amended its AR Facility. The amended AR Facility increased the amount the Company can borrow from $300.0 to $700.0 through August of 2027. On January 28, 2026, the Company further amended its AR Facility. Among other things, this amendment extended the scheduled termination date to January 26, 2029, and permits the Company at its option to increase the facility limit from $700.0 to $825.0 at any time on or before May 29, 2026.
The SPV is a variable interest entity for which the Company is the primary beneficiary. The SPV’s sole business consists of the continuous purchase of receivables from the Company which is used as collateral for the loan. Although the SPV is included in the Company’s Condensed Consolidated Financial Statements, it is a separate legal entity with separate creditors.
Upon the transfer of ownership and control of the receivables to the SPV, the Company has no retained interests in the receivables sold and they become unavailable to the Company’s creditors should the relevant seller become insolvent. The Company has collection and administrative responsibilities for the receivables sold to the SPV.
The Company received no loan proceeds under the AR Facility during the three months ended March 31, 2026. During the three months ended March 31, 2025, the Company received loan proceeds of $225.0 under the AR Facility, which are included in cash from financing activities in the Condensed Consolidated Statement of Cash Flows.
Under the Company’s 2026 Term Loan, revolving credit facility, indentures relating to the Company’s senior notes, and AR Facility, the Company is subject to negative covenants limiting subsidiary indebtedness and certain other covenants typical for investment grade-rated borrowers, and with respect to the 2026 Term Loan and revolving credit facility, the Company is required to maintain certain leverage ratios. The Company was in compliance with all such covenants and leverage ratios at March 31, 2026, and expects that it will remain in compliance with its existing covenants and leverage ratios for the next 12 months.
7. PREFERRED STOCK AND COMMON SHAREHOLDERS’ EQUITY
The Company is authorized to issue up to 265.0 shares of its Common Stock. The Company is authorized to issue up to 30.0 shares of preferred stock, par value $0.10 per share. There were no preferred shares outstanding at March 31, 2026, and December 31, 2025.
The changes in the Company’s shares of Common Stock issued and outstanding are summarized below:
| Three Months Ended March 31, 2026 | |||||||||||||||||
| Beginning balance | 82.2 | ||||||||||||||||
| Shares issued under employee stock plans | 0.5 | ||||||||||||||||
| Shares repurchased | (0.4) | ||||||||||||||||
| Ending balance | 82.3 |
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. During the three months ended March 31, 2026, the Company purchased 0.4 shares of its Common Stock at an average price of $273.76 per share for a total cost of $98.0. During the three months ended March 31, 2025, the Company did not repurchase any shares of its Common Stock. At March 31, 2026, the Company had outstanding authorization from its Board to purchase up to $732.4 maximum value of shares of Common Stock.
When the Company repurchases shares of Common Stock, the amount paid to repurchase the shares in excess of the par or stated value is allocated to Additional paid-in-capital within the Condensed Consolidated Balance Sheet unless subject to
LABCORP HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and Shares in Millions, Except Per Share Data)
(Unaudited)
limitation or the balance in Additional paid-in-capital is exhausted. Remaining amounts are recognized as a reduction in Retained earnings within the Company’s Condensed Consolidated Balance Sheet.
Dividends
During the three months ended March 31, 2026, and 2025, the Company declared and paid a cash dividend of $0.72 per share of Common Stock.
On April 9, 2026, the Company announced a cash dividend of $0.72 per share of Common Stock, or approximately $60.0 in the aggregate. The dividend will be paid on June 11, 2026, to stockholders of record of all issued and outstanding shares of Common Stock as of the close of business on May 29, 2026. The declaration and payment of any future dividends will be at the discretion of the Board.
Accumulated Other Comprehensive Loss
The components of Accumulated other comprehensive loss were as follows:
| Foreign Currency Translation Adjustments | Net Benefit Plan Adjustments | Accumulated Other Comprehensive Loss | |||||||||||||||||||||
| Balance at December 31, 2024 | $ | (264.7) | $ | 3.1 | $ | (261.6) | |||||||||||||||||
| Current year adjustments | 69.7 | 0.4 | 70.1 | ||||||||||||||||||||
| Tax effect on adjustments | — | (0.1) | (0.1) | ||||||||||||||||||||
| Balance at March 31, 2025 | $ | (195.0) | $ | 3.4 | $ | (191.6) | |||||||||||||||||
| Balance at December 31, 2025 | $ | (33.0) | $ | 5.4 | $ | (27.6) | |||||||||||||||||
| Current year adjustments | (36.0) | 0.5 | (35.5) | ||||||||||||||||||||
| Tax effect of adjustments | — | (0.1) | (0.1) | ||||||||||||||||||||
| Balance at March 31, 2026 | $ | (69.0) | $ | 5.8 | $ | (63.2) | |||||||||||||||||
8. COMMITMENTS AND CONTINGENCIES
Commitments
The Company has a noncancelable contract with a vendor to purchase supplies inventory pursuant to which the Company is obligated to make expected total future minimum payments of $122.3, including $27.8 for the remainder of 2026, $20.5 in 2027, and $74.0 in 2028.
Legal Contingencies
The Company is involved from time to time in various claims and legal actions, including arbitrations, class actions, and other litigation (including those described in more detail below), arising in the ordinary course of business. Some of these actions involve claims that are substantial in amount. These matters include, but are not limited to, intellectual property disputes, commercial and contract disputes, professional liability claims, employee-related matters, transaction-related disputes, securities and corporate law matters, and inquiries, including subpoenas and other civil investigative demands, from governmental agencies, Medicare or Medicaid payers, and MCOs reviewing billing practices or requesting comment on allegations of billing irregularities that are brought to their attention through billing audits or third parties. The Company receives civil investigative demands or other inquiries from various governmental bodies in the ordinary course of its business. Such inquiries can relate to the Company or other parties, including physicians and other health care providers. The Company works cooperatively to respond to appropriate requests for information.
The Company also is named from time to time in suits brought under the qui tam provisions of the False Claims Act and comparable state laws. These suits typically allege that the Company has made false statements and/or certifications in connection with claims for payment from U.S. federal or state healthcare programs. The suits may remain under seal (hence, unknown to the Company) for some time while the government decides whether to intervene on behalf of the qui tam plaintiff. Such claims are an inevitable part of doing business in the healthcare field today.
The Company believes that it is in compliance in all material respects with all statutes, regulations, and other requirements applicable to its commercial laboratory operations and drug development support services. The healthcare diagnostics and drug development industries are, however, subject to extensive regulation, and the courts have not interpreted many of the applicable statutes and regulations. Therefore, the applicable statutes and regulations could be interpreted or applied by a prosecutorial, regulatory, or judicial authority in a manner that would adversely affect the Company. Potential sanctions for violation of these
LABCORP HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and Shares in Millions, Except Per Share Data)
(Unaudited)
statutes and regulations include significant civil and criminal penalties, fines, the loss of various licenses, certificates and authorizations, additional liabilities from third-party claims, and/or exclusion from participation in government programs.
Many of the current claims and legal actions against the Company are in preliminary stages, and many of these cases seek an indeterminate amount of damages. The Company records an aggregate legal reserve, which is determined using calculations based on historical loss rates and assessment of trends experienced in settlements and defense costs. In accordance with FASB Accounting Standards Codification Topic 450, Contingencies, the Company establishes reserves for judicial, regulatory, and arbitration matters outside the aggregate legal reserve if and when those matters present loss contingencies that are both probable and reasonably estimable and would exceed the aggregate legal reserve. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is reasonably possible but not known or probable, and may be reasonably estimated, the estimated loss or range of loss is disclosed. When loss contingencies are not both probable and reasonably estimable, the Company does not establish separate reserves.
The Company is unable to estimate a range of reasonably possible loss for the proceedings described in more detail below in which damages either have not been specified or, in the Company’s judgment, are unsupported and/or exaggerated and (i) the proceedings are in early stages, (ii) there is uncertainty as to the outcome of pending appeals or motions, (iii) there are significant factual issues to be resolved, and/or (iv) there are novel legal issues to be presented. For these proceedings, however, the Company does not believe, based on currently available information, that the adverse outcomes are probable and reasonably estimable, and it does not believe they will have a material adverse effect on the Company’s financial statements.
The Company has received various subpoenas and other civil investigative demands related to Medicaid billing. In October 2013, the Company received a Civil Investigative Demand from the State of Texas Office of the Attorney General requesting documents related to its billing to Texas Medicaid. The Company cooperated with this request. On October 5, 2018, the Company received a second Civil Investigative Demand from the State of Texas Office of the Attorney General requesting documents related to its billing to Texas Medicaid. The Company cooperated with this request. On January 26, 2021, the Company was notified that a qui tam Petition was pending under seal in the District Court, 250th Judicial District, Travis County, Texas, and that the State of Texas had intervened. On April 14, 2021, the Petition was unsealed. The Petition alleges that the Company submitted claims for reimbursement to Texas Medicaid that were higher than permitted under Texas Medicaid’s alleged “best price” regulations, and that the Company offered remuneration to Texas healthcare providers in the form of discounted pricing for certain laboratory testing services in exchange for the providers’ referral of Texas Medicaid business to the Company. The Petition seeks actual and double damages and civil penalties, as well as recovery of costs, attorney’s fees, and legal expenses. On August 1, 2022, the District Court entered an order granting the Company’s Motion for Partial Summary Judgment with respect to the claim that the Company submitted claims for reimbursement to Texas Medicaid that were higher than permitted under Texas Medicaid’s alleged “best price” regulations. Plaintiffs filed a Notice of Non-Suit and Motion for Entry of Final Judgment and, on November 11, 2022, the court entered a judgment. Plaintiffs filed a Notice of Appeal with respect to the court’s order granting the Company’s Motion for Partial Summary Judgment, referenced above. On December 31, 2024, the Texas Court of Appeals issued a decision reversing the District Court’s order granting the Company’s Motion for Partial Summary Judgment. On February 28, 2025, the Company filed in the Texas Supreme Court a Petition for Review with respect to the Texas Court of Appeals decision. On January 16, 2026, the Texas Supreme Court granted the Petition for Review, and on February 12, 2026, the Texas Supreme Court held oral argument. The Company will vigorously defend the lawsuit.
On May 14, 2019, Retrieval-Masters Creditors Bureau, Inc. d/b/a AMCA, an external collection agency, notified the Company about a security incident AMCA experienced that may have involved certain personal information about some of the Company’s patients (the AMCA Incident). The Company referred patient balances to AMCA only when direct collection efforts were unsuccessful. The Company’s systems were not impacted by the AMCA Incident. Upon learning of the AMCA Incident, the Company promptly stopped sending new collection requests to AMCA and stopped AMCA from continuing to work on any pending collection requests from the Company. AMCA informed the Company that it appeared that an unauthorized user had access to AMCA’s system between August 1, 2018, and March 30, 2019, and that AMCA could not rule out the possibility that personal information on AMCA’s system was at risk during that time period. Information on AMCA’s affected system from the Company may have included name, address, and balance information for the patient and person responsible for payment, along with the patient’s phone number, date of birth, referring physician, and date of service. The Company was later informed by AMCA that health insurance information may have been included for some individuals, and because some insurance carriers utilize the Social Security Number as a subscriber identification number, the Social Security Number for some individuals may also have been affected. No ordered tests, laboratory test results, or diagnostic information from the Company were in the AMCA affected system. The Company notified individuals for whom it had a valid mailing
LABCORP HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and Shares in Millions, Except Per Share Data)
(Unaudited)
address. For the individuals whose Social Security Number was affected, the notice included an offer to enroll in credit monitoring and identity protection services that was provided free of charge for 24 months.
Twenty-three putative class action lawsuits were filed against the Company related to the AMCA Incident in various U.S. District Courts. Numerous similar lawsuits have been filed against other healthcare providers who used AMCA. These lawsuits were consolidated into a multidistrict litigation in the District of New Jersey. On November 15, 2019, the Plaintiffs filed a Consolidated Class Action Complaint in the U.S. District Court of New Jersey. The consolidated Complaint generally alleged that the Company did not adequately protect its patients’ data and failed to timely notify those patients of the AMCA Incident. The Complaint asserted various causes of action, including but not limited to negligence, breach of implied contract, unjust enrichment, and the violation of state data protection statutes. The Complaint sought damages on behalf of a class of all affected Company customers. On January 22, 2020, the Company filed Motions to Dismiss all claims. On December 16, 2021, the court granted in part and denied in part the Company’s Motion to Dismiss. On March 31, 2022, the Plaintiffs filed an Amended Complaint alleging claims for negligence, negligence per se, breach of confidence, invasion of privacy, and various state statutory claims, including a claim under the California Confidentiality of Medical Information Act. The Company filed a Motion to Dismiss certain claims of the Amended Complaint. On May 5, 2023, the court granted in part and denied in part the Company’s Motion to Dismiss. On November 1, 2024, Plaintiffs served their motion for class certification. On March 2, 2026, the parties entered into a Class Action Settlement and Release, which is subject to court approval.
The Company was served with a shareholder derivative lawsuit, Raymond Eugenio, Derivatively on Behalf of Nominal Defendant, Laboratory Corporation of America Holdings v. Lance Berberian, et al., filed in the Court of Chancery of the State of Delaware on April 23, 2020. The complaint asserts derivative claims on the Company’s behalf against the Company’s board of directors and certain executive officers. The complaint generally alleges that the defendants failed to ensure that the Company utilized proper cybersecurity safeguards and failed to implement a sufficient response to data security incidents, including the AMCA Incident. The complaint asserts derivative claims for breach of fiduciary duty and seeks relief including damages, certain disclosures, and certain changes to the Company’s internal governance practices. On June 2, 2020, the Company filed a Motion to Stay the lawsuit due to its overlap with the multi-district litigation referenced above. On July 2, 2020, the Company filed a Motion to Dismiss. On July 14, 2020, the court entered an order staying the lawsuit pending the resolution of the multi-district litigation. The Company will vigorously defend the lawsuit.
Certain governmental entities have requested information from the Company related to the AMCA Incident. The Company received a request for information from the OCR of the Department of Health and Human Services. On April 28, 2020, OCR notified the Company of the closure of its inquiry. The Company has also received requests from a multi-state group of state Attorneys General and is cooperating with these requests for information.
On January 31, 2020, the Company was served with a putative class action lawsuit, Luke Davis and Julian Vargas, et al. v. Laboratory Corporation of America Holdings, filed in the U.S. District Court for the Central District of California. The lawsuit alleges that visually impaired patients are unable to use the Company’s touchscreen kiosks at Company PSCs in violation of the Americans with Disabilities Act and similar California statutes. The lawsuit seeks statutory damages, injunctive relief, and attorney’s fees and costs. On March 20, 2020, the Company filed a Motion to Dismiss Plaintiffs’ Complaint and to Strike Class Allegations. In August 2020, the Plaintiffs filed an Amended Complaint. On April 26, 2021, the Plaintiffs and the Company each filed Motions for Summary Judgment and the Plaintiffs filed a Motion for Class Certification. On May 23, 2022, the court entered an order granting Plaintiffs’ Motion for Class Certification. On June 6, 2022, the Company filed a Petition for Permission to Appeal the Order Granting Class Certification with the U.S. Court of Appeals for the Ninth Circuit. On September 22, 2022, the Ninth Circuit granted the Company’s Petition for Permission to Appeal the Order Granting Class Certification. On February 8, 2024, the Ninth Circuit affirmed the trial court’s decision to certify both a California damages class and a nationwide injunctive class. On March 25, 2024, the Company filed a Petition for Rehearing En Banc with the Ninth Circuit. On April 18, 2024, the Ninth Circuit denied the Petition for Rehearing En Banc. On September 13, 2024, the Company filed a Petition for Writ of Certiorari with the U.S. Supreme Court, which was granted on January 24, 2025, and then dismissed on June 5, 2025. In March 2026, the parties filed cross Motions for Summary Judgment. The Company will vigorously defend the lawsuit.
On October 16, 2020, Ravgen Inc. filed a patent infringement lawsuit, Ravgen Inc. v. Laboratory Corporation of America Holdings, in the U.S. District Court for the Western District of Texas, alleging infringement of two Ravgen-owned U.S. patents. The lawsuit sought monetary damages, enhancement of those damages for willfulness, and recovery of attorney’s fees and costs. On September 28, 2022, a jury rendered a verdict in favor of the Plaintiff on the sole asserted patent finding that the Company willfully infringed Ravgen’s patent, and awarded damages of $272.0. Plaintiff filed post-trial motions seeking enhanced damages of up to $817.0 based on the finding of willfulness, as well as attorney’s fees and costs. On May 12, 2023, the court issued an order granting Plaintiff’s motion in part and awarding enhanced damages of $100.0. On January 23, 2025,
LABCORP HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and Shares in Millions, Except Per Share Data)
(Unaudited)
the court issued an order awarding Plaintiff post-verdict supplemental damages of $2.6, an ongoing royalty of one hundred dollars and 00/100 cents per test through the life of the patent at issue, pre- and post-judgment interest, and other relief. In January and February 2025, the trial court entered orders denying the Company’s post-trial motions and the Company has filed an appeal. On March 18, 2025, the Company filed an appeal bond with the Court to stay enforcement of the judgment pending appeal. The Company strongly disagrees with the verdict, based on a number of legal factors, and will vigorously defend the lawsuit through the appeal process.
On June 7, 2023, the Company was served with a putative class action lawsuit, Connie Howard, Yadira Yazmin Hernandez, and Deborah Reynolds, et al. v. Laboratory Corporation of America, Laboratory Corporation of America Holdings, and Meta Platforms, Inc., filed in the U.S. District Court for the Northern District of California, alleging that the Company’s website includes a tracking code created by Meta, known as the Meta Pixel, that sent information related to Plaintiffs and their online activities to Meta. Plaintiffs assert claims against the Company under California and Pennsylvania law and seek to represent classes of all persons in California, or in Pennsylvania, who allegedly entered search terms into the Company’s website and who used Facebook during a time that Plaintiffs allege the Meta Pixel was active on the Company’s website. Plaintiffs seek an injunction, damages, attorneys’ fees, and costs. On August 23, 2023, the Company filed a Motion to Dismiss. On September 5, 2023, the lawsuit was transferred to the U.S. District Court for the Middle District of North Carolina. On September 9, 2023, Plaintiffs filed an Amended Complaint. Among other things, the Amended Complaint contains allegations that in addition to the Meta Pixel, the Company’s website uses Google Analytics and other online tracking technologies. On October 11, 2023, the Company filed a Motion to Dismiss the Amended Complaint. On April 2, 2026, the parties entered into a Class Action Settlement and Release, which is subject to court approval.
On June 27, 2022, the Company was served with a Subpoena Duces Tecum issued by the DOJ in Boston, Massachusetts requiring the production of documents related to urine drug testing. The Company is cooperating with the DOJ.
There are various other pending legal proceedings involving the Company including, but not limited to, additional employment-related lawsuits, professional liability lawsuits, and commercial lawsuits. While it is not feasible to predict the outcome of such proceedings, in the opinion of the Company, the likelihood of loss is remote and any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to the Company’s financial condition, results of operations, or cash flows, either individually or in the aggregate.
Under the Company’s present insurance programs, coverage is obtained for catastrophic exposure as well as those risks required to be insured by law or contract. The Company is responsible for the uninsured portion of losses related primarily to general, professional and vehicle liability, certain medical costs and workers’ compensation. The self-insured retentions are on a per-occurrence basis without any aggregate annual limit. Provisions for losses expected under these programs are recorded based upon the Company’s estimates of the aggregated liability of claims incurred.
9. FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The Company’s population of financial assets and liabilities subject to fair value measurements were as follows:
| Fair Value Measurements | |||||||||||||||||||||||||||||
| Condensed Consolidated Balance Sheets Classification | March 31, 2026 | ||||||||||||||||||||||||||||
| Fair Value at | Using Fair Value Hierarchy | ||||||||||||||||||||||||||||
| March 31, 2026 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
| Noncontrolling interest put | Noncontrolling interest | $ | 16.9 | $ | — | $ | 16.9 | $ | — | ||||||||||||||||||||
| Cross currency swaps | Other liabilities | $ | 268.8 | $ | — | $ | 268.8 | $ | — | ||||||||||||||||||||
| Interest rate swaps | Other liabilities | $ | 53.8 | $ | — | $ | 53.8 | $ | — | ||||||||||||||||||||
| Cash surrender value of life insurance policies | Other assets, net | $ | 102.3 | $ | — | $ | 102.3 | $ | — | ||||||||||||||||||||
| Deferred compensation asset | Other assets, net | $ | 56.5 | $ | — | $ | 56.5 | $ | — | ||||||||||||||||||||
| Deferred compensation liability | Other liabilities | $ | 153.5 | $ | — | $ | 153.5 | $ | — | ||||||||||||||||||||
| Contingent consideration | Accrued expenses and other/Other liabilities | $ | 139.8 | $ | — | $ | — | $ | 139.8 | ||||||||||||||||||||
LABCORP HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and Shares in Millions, Except Per Share Data)
(Unaudited)
| Fair Value Measurements | |||||||||||||||||||||||||||||
| Condensed Consolidated Balance Sheets Classification | December 31, 2025 | ||||||||||||||||||||||||||||
| Fair Value at | Using Fair Value Hierarchy | ||||||||||||||||||||||||||||
| December 31, 2025 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
| Noncontrolling interest put | Noncontrolling interest | $ | 16.9 | $ | — | $ | 16.9 | $ | — | ||||||||||||||||||||
| Cross currency swaps | Other liabilities | $ | 274.0 | $ | — | $ | 274.0 | $ | — | ||||||||||||||||||||
| Interest rate swaps | Other liabilities | $ | 52.7 | $ | — | $ | 52.7 | $ | — | ||||||||||||||||||||
| Cash surrender value of life insurance policies | Other assets, net | $ | 99.6 | $ | — | $ | 99.6 | $ | — | ||||||||||||||||||||
| Deferred compensation asset | Other assets, net | $ | 53.1 | $ | — | $ | 53.1 | $ | — | ||||||||||||||||||||
| Deferred compensation liability | Other liabilities | $ | 150.5 | $ | — | $ | 150.5 | $ | — | ||||||||||||||||||||
| Contingent consideration | Accrued expenses and other/Other liabilities | $ | 50.0 | $ | — | $ | — | $ | 50.0 |
| Fair Value Measurement of Level 3 Liabilities: | Contingent Consideration | |||||||
| Balance at December 31, 2025 | $ | 50.0 | ||||||
| Additions from business acquisitions | 89.8 | |||||||
| Balance at March 31, 2026 | $ | 139.8 | (1) |
(1)At March 31, 2026, $75.5 and $64.3 of contingent consideration is included within Accrued expenses and other and Other liabilities, respectively, in the Company’s Condensed Consolidated Balance Sheets.
The Company has a noncontrolling interest put option related to its Ontario subsidiary that has been classified as mezzanine equity in the Company’s Condensed Consolidated Balance Sheets. The noncontrolling interest put is valued at its contractually determined value, which approximates fair value.
The fair values of derivative financial instruments have been determined based on market value equivalents at the balance sheet date, taking into account the current interest rate environment and therefore were classified as Level 2 measurements in the fair value hierarchy.
The Company offers certain employees the opportunity to participate in an employee-funded DCP. A participant’s deferrals are allocated by the participant to one or more of multiple measurement funds, which are indexed to externally managed funds. From time to time, to offset the cost of the growth in the participant’s investment accounts, the Company purchases life insurance policies, with the Company named as beneficiary of the policies. Changes in the cash surrender value of the life insurance policies are based upon earnings and changes in the value of the underlying investments, which are typically invested in a similar manner to the participant’s allocations. Changes in the fair value of the DCP obligation are derived using quoted prices in active markets based on the market price per unit multiplied by the number of units. The cash surrender value and the DCP obligations are classified within Level 2 because their inputs are derived principally from observable market data by correlation to the hypothetical investments.
The Company measured the fair value of contingent consideration liabilities as Level 3 instruments. These contingent consideration liabilities were recorded at fair value on the acquisition date and are remeasured quarterly based on the then assessed fair value and adjusted, if necessary. The increases or decreases in the fair value of contingent consideration payable can result from changes in anticipated revenue levels and changes in assumed discount periods and rates. As the fair value measure is based on significant inputs that are not observable in the market, they are categorized as Level 3.
The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable are considered to be representative of their respective fair values due to their short-term nature. Although recorded at amortized cost on the Company’s Condensed Consolidated Balance Sheets, the fair market value of the Company’s senior notes was $4,915.9 and $4,963.6 at March 31, 2026, and December 31, 2025, respectively. At March 31, 2026, the carrying value of the Company’s 2026 Term Loan, also recorded at amortized cost, was estimated to approximate fair value primarily due to its variable interest rate. The Company’s senior notes and 2026 Term Loan are considered Level 2 instruments, as the fair market values of these instruments are based on observable market pricing/inputs.
Interest Rate Swaps
The Company is party to fixed-to-variable interest rate swap agreements for its 2.70% senior notes due 2031 with an aggregate notional amount of $500.0 and variable interest rates currently based on the compounded SOFR, plus 1.33%.
Interest rate swap agreements, which have been used by the Company from time to time in the management of interest rate
LABCORP HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and Shares in Millions, Except Per Share Data)
(Unaudited)
exposure, are accounted for at fair value. These derivative financial instruments are accounted for as fair value hedges that increase or decrease the value of the Company’s senior notes with the offset being recorded as a component of other long-term assets or liabilities, as applicable. As the specific terms and notional amounts of the derivative financial instruments match those of the fixed-rate debt being hedged, the derivative instruments are assumed to be perfectly effective hedges and accordingly, there is no impact to the Company’s Condensed Consolidated Statements of Operations.
Cross Currency Swaps
The Company is party to various USD to Swiss Franc cross-currency swap agreements with an aggregate notional amount of $1,200.0, with $300.0 maturing in 2029, $300.0 maturing in 2031, and $600.0 maturing in 2034.
The above instruments are designated as a hedge against the impact of foreign exchange movements on its net investment in a Swiss subsidiary. Changes in the fair value of the cross-currency swaps are charged or credited through Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheet until the hedged item is recognized in earnings. The cumulative amount of the fair value hedging adjustments is recognized as currency translation within the Condensed Consolidated Statement of Comprehensive Earnings.
The table below provides information regarding the location and amount of pretax gains of derivatives designated in fair value hedging relationships:
| Amounts included in other comprehensive loss | ||||||||||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Cross currency swaps | $ | 5.2 | $ | 7.0 |
10. SUPPLEMENTAL CASH FLOW INFORMATION
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash paid during the period for: | |||||||||||
| Interest | $ | 45.2 | $ | 92.4 | |||||||
| Income taxes, net of refunds | $ | 13.1 | $ | 20.3 | |||||||
| Disclosure of non-cash financing and investing activities: | |||||||||||
| Change in accrued property, plant, and equipment | $ | (7.0) | $ | (15.4) | |||||||
| Contingent consideration related to business acquisitions | $ | 89.8 | $ | 24.0 | |||||||
11. BUSINESS SEGMENT INFORMATION
The following table is a summary of segment information for the three months ended March 31, 2026, and 2025. The “management approach” has been used to present the following segment information. This approach is based upon the way the management of the Company organizes segments within an enterprise for making operating decisions and assessing performance. Financial information is reported on the basis that it is used internally by the CODM for evaluating segment performance and deciding how to allocate resources to segments. The Company’s chief executive officer has been identified as the CODM.
The Company’s CODM uses segment operating income to evaluate segment performance and to allocate resources. This segment performance measure excludes the amortization of intangibles and other assets, restructuring and other charges, goodwill and other asset impairments, and certain corporate charges for items such as transaction costs and other special items. Other operating expenses are comprised primarily of rent, maintenance, sendout testing, utilities, travel and entertainment, and other segment expenses, including shipping costs for Dx. Segment asset information is not presented because it is not used by the CODM.
LABCORP HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and Shares in Millions, Except Per Share Data)
(Unaudited)
| For the Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||
| Revenues: | Dx | BLS | Intercompany eliminations and other | LHI | ||||||||||||||||||||||
| Revenues | $ | 2,762.1 | $ | 780.6 | $ | (5.1) | $ | 3,537.6 | ||||||||||||||||||
| Operating Earnings: | ||||||||||||||||||||||||||
| Labor | 1,188.1 | 309.3 | ||||||||||||||||||||||||
| Supplies | 613.5 | 121.5 | ||||||||||||||||||||||||
| Shipping costs | 110.8 | |||||||||||||||||||||||||
| Depreciation | 63.8 | 28.6 | ||||||||||||||||||||||||
| Other operating expenses | 438.0 | 89.7 | ||||||||||||||||||||||||
| Segment operating income | $ | 458.7 | $ | 120.7 | $ | 579.4 | ||||||||||||||||||||
| General corporate and unallocated expenses | (116.6) | |||||||||||||||||||||||||
| Amortization of intangibles and other assets | (75.6) | |||||||||||||||||||||||||
| Restructuring and other charges | (6.4) | |||||||||||||||||||||||||
| Total Operating income | 380.8 | |||||||||||||||||||||||||
| Other (expense) income: | ||||||||||||||||||||||||||
| Interest expense | (55.1) | |||||||||||||||||||||||||
| Investment income | 12.2 | |||||||||||||||||||||||||
| Equity method loss, net | (5.1) | |||||||||||||||||||||||||
| Other, net | (13.1) | |||||||||||||||||||||||||
| Earnings from operations before income taxes | $ | 319.7 |
| For the Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||
| Revenues: | Dx | BLS | Intercompany eliminations and other | LHI | ||||||||||||||||||||||
| Revenues | $ | 2,629.6 | $ | 721.3 | $ | (5.8) | $ | 3,345.1 | ||||||||||||||||||
| Operating Earnings: | ||||||||||||||||||||||||||
| Labor | 1,123.6 | 289.7 | ||||||||||||||||||||||||
| Supplies | 586.6 | 111.1 | ||||||||||||||||||||||||
| Shipping costs | 95.0 | |||||||||||||||||||||||||
| Depreciation | 61.7 | 28.6 | ||||||||||||||||||||||||
| Other operating expenses | 430.2 | 90.0 | ||||||||||||||||||||||||
| Segment operating income | $ | 427.5 | $ | 106.9 | $ | 534.4 | ||||||||||||||||||||
| General corporate and unallocated expenses | (132.4) | |||||||||||||||||||||||||
| Amortization of intangibles and other assets | (69.6) | |||||||||||||||||||||||||
| Restructuring and other charges | (6.4) | |||||||||||||||||||||||||
| Total Operating income | 326.0 | |||||||||||||||||||||||||
| Other (expense) income: | ||||||||||||||||||||||||||
| Interest expense | (56.0) | |||||||||||||||||||||||||
| Investment income | 6.5 | |||||||||||||||||||||||||
| Equity method loss, net | (0.3) | |||||||||||||||||||||||||
| Other, net | (1.0) | |||||||||||||||||||||||||
| Earnings from operations before income taxes | $ | 275.2 |
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