What is the market's earnings forecast for Quest Diagnostics next quarter?

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What were the key takeaways from Quest Diagnostics’s earnings call?

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What factors drove the changes in Quest Diagnostics's revenue and profit?

- **Revenue Growth**: 13.1% YoY to $2.82B, driven by 6.8% organic growth in advanced diagnostics and consumer channels.
- **Strategic Wins**: $1B+ annual Co-Lab deal with Corewell Health; AD-Detect volumes double QoQ.
- **Consumer Momentum**: questhealth.com up 30-40% YoY; WHOOP/OURA partnerships to launch Q4.
- **Margin Risks**: $100M PAMA impact in 2026 if no relief; elevated medical costs (+40-50bps Q3 margin drag).
- **Innovation Lead**: FDA Breakthrough for Haystack MRD; 25+ clinical studies underway for MRD testing.

**【CEO Opening Remarks】**
- Q3 2025 revenue grew 13.1% YoY to $2.82 billion, with 6.8% organic growth driven by advanced diagnostics, acquisitions, and consumer channel expansion.
- Announced a joint venture with Corewell Health in Michigan, expected to generate $1 billion annually from Co-Lab solutions.
- Highlighted strong demand for AI-driven innovations like AD-Detect (Alzheimer's test) and Haystack MRD (cancer monitoring), with AD-Detect volumes doubling QoQ.
- Consumer health partnerships with WHOOP and OURA are driving direct-to-consumer growth, with questhealth.com up 30-40% YoY.
- Raised full-year 2025 guidance: revenue $10.96-11.0 billion, adjusted EPS $9.76-9.84.

**【CFO Financial Commentary】**
- GAAP EPS: $2.16 (vs. $1.99 YoY), Adjusted EPS: $2.60 (vs. $2.30 YoY), driven by 16.3% operating margin (vs. 15.5% YoY).
- Cash flow from operations: $1.42 billion YTD (63% YoY growth), guided to $1.8 billion for 2025.
- Project Nova investments (~$30 million in 2025) will modernize order-to-cash processes but may impact near-term margins.
- Warned of $100 million PAMA-related margin pressure in 2026 if no legislative relief.

**【Q&A Highlights】**
- **Utilization Trends**: Organic req volume +3.9% YoY, driven by autoimmune, cardiometabolic, and consumer testing. Test mix improvement (+3% rev/req) expected to continue.
- **PAMA Risk**: 50% chance of delay vs. 50% chance of Results Act passage; $100M margin impact if no relief, partially offset by cost control.
- **Consumer Channel**: Direct-to-consumer growth (~30-40% YoY) and partnerships with WHOOP/OURA expected to accelerate in Q4.
- **Project Nova**: $310M 6-year investment to digitize workflows; 2026 spend will be paced based on PAMA outcome.
- **Haystack MRD**: FDA Breakthrough Designation; ~$100M+ revenue potential in 2026 as reimbursement expands.


Quest Diagnostics Incorporated (DGX) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

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Operating Expenses

Selling, General and Administrative Expenses

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Net Income

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DGX

DGX fundamentals

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