Labcorp Q2 2025 presentation: Revenue growth accelerates to 9.5%, guidance raised

Introduction & Market Context

Labcorp Holdings Inc. (NYSE:LH) released its second quarter 2025 financial presentation on July 24, 2025, revealing accelerated revenue growth and improved financial metrics that prompted the company to raise its full-year guidance. The stock responded positively, rising 1.99% in premarket trading to $255.50, following a previous close of $250.51.

The diagnostic testing and drug development services provider demonstrated significant improvement from its first quarter performance, when it reported 5.3% revenue growth that fell short of analyst expectations. Today’s presentation shows the company has gained momentum in the second quarter, particularly in its Biopharma Laboratory Services segment.

Quarterly Performance Highlights

Labcorp reported second quarter 2025 revenue of $3.527 billion, representing a 9.5% year-over-year increase. This growth rate marks a substantial acceleration from the 5.3% reported in Q1 2025. The company’s adjusted EBITDA for Q2 reached $627.8 million, compared to $574.6 million in the same period last year.

As shown in the following revenue distribution chart, Diagnostics Laboratories continues to be the company’s primary revenue driver, accounting for 77.8% of total revenue, while Biopharma Laboratory Services contributes 22.2%:

From a geographic perspective, the United States remains Labcorp’s dominant market, generating 83.1% of total revenue, with international operations accounting for the remaining 16.9%. The company noted that no single foreign currency represents more than 10% of total revenues.

Segment Performance Analysis

The Diagnostics Laboratories segment generated $2.749 billion in revenue during Q2 2025, representing an 8.9% year-over-year increase. Meanwhile, the Biopharma Laboratory Services segment delivered particularly strong results with revenue of $785 million, growing 11.0% compared to the same period last year.

Foreign exchange movements had varying impacts on the company’s segments, as illustrated in this breakdown:

While foreign exchange had a minimal negative impact (-0.1%) on Diagnostics Laboratories revenue, it provided a significant boost to the Biopharma segment, contributing 3.2% to its year-over-year growth. On a constant currency basis, Biopharma’s growth was 7.8%, while Diagnostics grew 8.9%.

The Biopharma segment showed strengthening fundamentals across key metrics. The trailing twelve-month book-to-bill ratio improved to 1.11x as of June 30, 2025, compared to 1.00x a year earlier. This indicates growing demand for Labcorp’s drug development services.

The following chart illustrates the positive trends in Biopharma’s backlog and order flow:

Total (EPA:TTEF) backlog reached $8.71 billion as of June 30, 2025, up from $7.92 billion a year ago. The estimated revenue expected to be recognized from this backlog over the next 12 months increased to $2.71 billion, compared to $2.50 billion as of June 30, 2024.

Updated 2025 Guidance

Following the strong second quarter performance, Labcorp raised its full-year 2025 guidance across all key metrics, as detailed in this outlook table:

The company now expects:

• Enterprise revenue of $13.98-14.13 billion, representing growth of 7.5-8.6% from 2024
• Diagnostics Laboratories revenue of $10.85-10.96 billion (7.0-8.0% growth)
• Biopharma Laboratory Services revenue of $3.10-3.14 billion (6.1-7.5% growth)
• Adjusted EPS of $16.05-16.50 (10.1-13.2% growth)
• Free cash flow of $1.13-1.28 billion (2.7-16.3% growth)

This updated guidance represents an improvement from the company’s previous outlook provided after Q1 results, which had projected enterprise revenue growth of 6.7-8.0% and adjusted EPS of $15.70-16.40.

Financial Position and Metrics

Labcorp maintained a stable financial position in Q2 2025, with key financial metrics showing consistent performance. The following table highlights select financial metrics over the past five quarters:

The company’s leverage ratio remained steady at 2.5x total debt to last twelve months adjusted EBITDA, while the net debt ratio improved slightly to 2.2x from 2.4x in the previous quarter. These metrics indicate Labcorp continues to maintain a healthy balance sheet while investing in growth.

Adjusted EBITDA improved to $627.8 million in Q2 2025 from $574.6 million in Q2 2024, reflecting enhanced operational efficiency and the positive impact of revenue growth. The company’s reconciliation of non-GAAP measures shows operating income of $394.5 million for Q2 2025, compared to $294.8 million in the same period last year.

Forward-Looking Statements

Labcorp’s presentation emphasized several factors that could impact future performance, including economic conditions, business strategies, acquisition benefits, government regulations, and changes in testing guidelines. The company’s raised guidance suggests management confidence in continued strong performance through the remainder of 2025.

The acceleration in revenue growth from Q1 to Q2, combined with the improving book-to-bill ratio in the Biopharma segment, indicates positive momentum heading into the second half of the year. The company’s geographic diversification, with 16.9% of revenue coming from international markets, provides some buffer against regional economic fluctuations.

With the stock trading at $255.50 in premarket activity, up 1.99% following the presentation, investors appear to be responding positively to the company’s accelerating growth and improved outlook for the remainder of 2025.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.