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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): October 22, 2024
Quest Diagnostics Incorporated
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or other jurisdiction of incorporation)
001-1221516-1387862
(Commission File Number)(I.R.S. Employer Identification No.)
500 Plaza Drive
Secaucus, NJ07094
(Address of principal executive offices)(Zip Code)
(973)520-2700
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 Par ValueDGXNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
    Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02. Results of Operations and Financial Condition

On October 22, 2024, Quest Diagnostics Incorporated (the "Company") issued a press release announcing, among other things, its results for the quarter ended September 30, 2024. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
    
Item 9.01. Financial Statements and Exhibits


Signature
    
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

October 22, 2024

QUEST DIAGNOSTICS INCORPORATED
By:/s/ Sean D. Mersten
Sean D. Mersten
Vice President and Corporate Secretary






Exhibit 99.1


Quest Diagnostics Reports Third Quarter 2024 Financial Results;
Updates Guidance for Full Year 2024
    
•Third quarter revenues of $2.49 billion, up 8.5% from 2023
•Third quarter reported diluted earnings per share ("EPS") of $1.99, up 1.5% from 2023; and adjusted diluted EPS of $2.30, up 3.6% from 2023
•Full year 2024 revenues now expected to be between $9.80 billion and $9.85 billion; reported diluted EPS now expected to be between $7.60 and $7.70; and adjusted diluted EPS expected to be between $8.85 and $8.95

SECAUCUS, N.J., October 22, 2024 - Quest Diagnostics Incorporated (NYSE: DGX), a leading provider of diagnostic information services, today announced financial results for the third quarter ended September 30, 2024.

"We delivered a strong third quarter, with total revenue growth of 8.5%, including 4.2% organic growth," said Jim Davis, Chairman, CEO and President. "Our performance was driven by new customer wins and expanded business with physicians and hospitals as well as recent acquisitions, including LifeLabs. We are now on track to complete eight acquisitions by year's end that meet our criteria for profitability, growth and returns."

“We have increased our 2024 revenue guidance due to contributions from recent acquisitions and have maintained the midpoint of our adjusted EPS guidance despite the impact of Hurricane Milton in the fourth quarter," Mr. Davis continued. "Given the strength of our business and revenue from acquisitions, we are well positioned to drive accelerated revenue and earnings growth in 2025."

Three Months Ended September 30,Nine Months Ended September 30,
20242023Change20242023Change
(dollars in millions, except per share data)
Reported:
Net revenues$2,488 $2,295 8.5 %$7,251 $6,964 4.1 %
Diagnostic Information Services revenues$2,427 $2,228 9.0 %$7,058 $6,755 4.5 %
Revenue per requisition3.3 %1.7 %
Requisition volume5.5 %2.7 %
  Organic requisition volume0.5 %0.7 %
Operating income (a)$330 $342 (3.3)%$985 $995 (1.0)%
Operating income as a percentage of net revenues (a)13.3 %14.9 %(1.6)%13.6 %14.3 %(0.7)%
Net income attributable to Quest Diagnostics (a)$226 $225 0.5 %$649 $662 (1.9)%
Diluted EPS (a)$1.99 $1.96 1.5 %$5.74 $5.79 (0.9)%
Cash provided by operations $356 $207 72.5 %$870 $745 17.0 %
Capital expenditures$106 $105 1.0 %$302 $336 (10.4)%
Adjusted (a):
Operating income$385 $380 1.3 %$1,132 $1,119 1.1 %
Operating income as a percentage of net revenues15.5 %16.6 %(1.1)%15.6 %16.1 %(0.5)%
Net income attributable to Quest Diagnostics$262 $254 3.1 %$758 $749 1.2 %
Diluted EPS$2.30 $2.22 3.6 %$6.70 $6.56 2.1 %
(a)For further details impacting the year-over-year comparisons related to operating income, operating income as a percentage of net revenues, net income attributable to Quest Diagnostics, and diluted EPS, see note 2 of the financial tables attached below.
1




Updated Guidance for Full Year 2024

The company updates its full year 2024 guidance as shown in the table below. The updated guidance reflects the impact of recent acquisitions including LifeLabs as well as the impact from Hurricane Milton in the fourth quarter. The company projects the disruption from Hurricane Milton to negatively impact net revenues by approximately $15 million and EPS by approximately 8 cents in the fourth quarter.

Updated GuidancePrior Guidance
LowHighLowHigh
Net revenues$9.80 billion$9.85 billion$9.50 billion$9.58 billion
Net revenues increase5.9%6.5%2.7%3.5%
Reported diluted EPS$7.60$7.70$7.57$7.77
Adjusted diluted EPS$8.85$8.95$8.80$9.00
Cash provided by operationsApproximately $1.3 billionApproximately $1.3 billion
Capital expenditures  Approximately $420 millionApproximately $420 million

Note on Non-GAAP Financial Measures

As used in this press release the term “reported” refers to measures under accounting principles generally accepted in the United States (“GAAP”). The term “adjusted” refers to non-GAAP operating performance measures that exclude special items such as restructuring and integration charges, amortization expense, excess tax benefits ("ETB") associated with stock-based compensation, gains and losses associated with changes in the carrying value of our strategic investments, and other items.

Non-GAAP adjusted measures are presented because management believes those measures are useful adjuncts to GAAP results. Non-GAAP adjusted measures should not be considered as an alternative to the corresponding measures determined under GAAP. Management may use these non-GAAP measures to evaluate our performance period over period and relative to competitors, to analyze the underlying trends in our business, to establish operational budgets and forecasts and for incentive compensation purposes. We believe that these non-GAAP measures are useful to investors and analysts to evaluate our performance period over period and relative to competitors, as well as to analyze the underlying trends in our business and to assess our performance. The additional tables attached below include reconciliations of non-GAAP adjusted measures to GAAP measures.

Conference Call Information

Quest Diagnostics will hold its quarterly conference call to discuss financial results beginning at 8:30 a.m. Eastern Time today.  The conference call can be accessed by dialing 888-455-0391 within the U.S. and Canada, or 773-756-0467 internationally, passcode: 7895081; or via live webcast on our website at www.QuestDiagnostics.com/investor. We suggest participants dial in approximately 10 minutes before the call.

A replay of the call may be accessed online at www.QuestDiagnostics.com/investor or, from approximately 10:30 a.m. Eastern Time on October 22, 2024 until midnight Eastern Time on November 5, 2024, by phone at 800-839-5154 for domestic callers or 203-369-3358 for international callers. Anyone listening to the call is encouraged to read our periodic reports, on file with the Securities and Exchange Commission, including the discussion of risk factors and historical results of operations and financial condition in those reports.


About Quest Diagnostics

Quest Diagnostics works across the healthcare ecosystem to create a healthier world, one life at a time. We provide diagnostic insights from the results of our laboratory testing to empower people, physicians and organizations to take action to improve health outcomes. Derived from one of the world's largest databases of de-identifiable clinical lab results, Quest's diagnostic insights reveal new avenues to identify and treat disease, inspire healthy behaviors and improve healthcare management. Quest Diagnostics annually serves one in three adult Americans and half the physicians and hospitals in the United States, and our more than 50,000 employees understand that, in the right hands and with the right context, our diagnostic insights can inspire actions that transform lives and create a healthier world. www.QuestDiagnostics.com.

2



Forward Looking Statements

The statements in this press release which are not historical facts may be forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date that they are made and which reflect management’s current estimates, projections, expectations or beliefs and which involve risks and uncertainties that could cause actual results and outcomes to be materially different. Risks and uncertainties that may affect the future results of the company include, but are not limited to, adverse results from pending or future government investigations, lawsuits or private actions, the competitive environment, the complexity of billing, reimbursement and revenue recognition for clinical laboratory testing, changes in government regulations, changing relationships with customers, payers, suppliers or strategic partners, acquisitions and other factors discussed in the company's most recently filed Annual Report on Form 10-K and in any of the company's subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including those discussed in the “Business,” “Risk Factors,” “Cautionary Factors that May Affect Future Results” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those reports.

For further information: Wendy Bost, Quest Diagnostics (Media): 973-520-2800, Shawn Bevec, Quest Diagnostics (Investors): 973-520-2900

This earnings release, including the attached financial tables, is available online in the Newsroom section at www.QuestDiagnostics.com.

ADDITIONAL TABLES FOLLOW
3


Quest Diagnostics Incorporated and Subsidiaries
Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 2024 and 2023
(in millions, except per share data)
(unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Net revenues $2,488 $2,295 $7,251 $6,964 
Operating costs and expenses and other operating income:   
Cost of services1,677 1,541 4,865 4,647 
Selling, general and administrative 448 380 1,304 1,235 
Amortization of intangible assets32 27 90 81 
Other operating expense, net1 5 7 6 
Total operating costs and expenses, net 2,158 1,953 6,266 5,969 
Operating income330 342 985 995 
Other income (expense):    
Interest expense, net(49)(40)(136)(112)
Other income (expense), net15 (3)27 10 
Total non-operating expense, net(34)(43)(109)(102)
Income before income taxes and equity in earnings of equity method investees296 299 876 893 
Income tax expense(65)(68)(205)(208)
Equity in earnings of equity method investees, net of taxes6 6 14 18 
Net income237 237 685 703 
Less: Net income attributable to noncontrolling interests11 12 36 41 
Net income attributable to Quest Diagnostics$226 $225 $649 $662 
Earnings per share attributable to Quest Diagnostics’ common stockholders:
Basic$2.01 $1.99 $5.80 $5.87 
Diluted$1.99 $1.96 $5.74 $5.79 
Weighted average common shares outstanding:
Basic112 112 111 112 
Diluted113 114 112 114 

4


Quest Diagnostics Incorporated and Subsidiaries
Consolidated Balance Sheets
September 30, 2024 and December 31, 2023
(in millions, except per share data)
(unaudited)
September 30,
2024		December 31,
2023
Assets
Current assets:
Cash and cash equivalents$764 $686 
Accounts receivable, net1,376 1,210 
Inventories184 190 
Prepaid expenses and other current assets299 286 
Total current assets2,623 2,372 
Property, plant and equipment, net2,093 1,816 
Operating lease right-of-use assets661 602 
Goodwill8,605 7,733 
Intangible assets, net1,716 1,166 
Investments in equity method investees125 135 
Other assets272 198 
Total assets$16,095 $14,022 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses$1,313 $1,359 
Current portion of long-term debt603 303 
Current portion of long-term operating lease liabilities176 153 
Total current liabilities2,092 1,815 
Long-term debt5,648 4,410 
Long-term operating lease liabilities543 503 
Other liabilities891 876 
Redeemable noncontrolling interest80 76 
Stockholders’ equity:
Quest Diagnostics stockholders’ equity:
Common stock, par value $0.01 per share; 600 shares authorized as of both September 30, 2024 and December 31, 2023; 162 shares issued as of both September 30, 2024 and December 31, 2023
2 2 
Additional paid-in capital2,332 2,320 
Retained earnings9,222 8,825 
Accumulated other comprehensive loss(15)(14)
Treasury stock, at cost; 50 shares and 51 shares as of September 30, 2024 and December 31, 2023, respectively
(4,732)(4,826)
Total Quest Diagnostics stockholders’ equity6,809 6,307 
Noncontrolling interests32 35 
Total stockholders’ equity6,841 6,342 
Total liabilities and stockholders’ equity$16,095 $14,022 

5


Quest Diagnostics Incorporated and Subsidiaries
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2024 and 2023
(in millions)
(unaudited)
Nine Months Ended September 30,
20242023
Cash flows from operating activities:
Net income$685 $703 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization358 330 
Provision for credit losses4 — 
Deferred income tax benefit(21)(39)
Stock-based compensation expense61 58 
Other, net17 12 
Changes in operating assets and liabilities: 
Accounts receivable(140)(86)
Accounts payable and accrued expenses(102)(231)
Income taxes payable31 — 
Other assets and liabilities, net(23)(2)
Net cash provided by operating activities870 745 
Cash flows from investing activities:
Business acquisitions, net of cash acquired(1,781)(611)
Capital expenditures(302)(336)
Other investing activities, net37 — 
Net cash used in investing activities(2,046)(947)
Cash flows from financing activities:
Proceeds from borrowings1,846 1,703 
Repayments of debt(302)(1,426)
Exercise of stock options52 60 
Employee payroll tax withholdings on stock issued under stock-based compensation plans(24)(28)
Dividends paid(247)(234)
Distributions to noncontrolling interest partners(35)(41)
Other financing activities, net(36)(4)
Net cash provided by financing activities1,254 30 
Net change in cash and cash equivalents and restricted cash78 (172)
Cash and cash equivalents and restricted cash, beginning of period686 315 
Cash and cash equivalents and restricted cash, end of period$764 $143 
Cash paid during the period for:
Interest$167 $97 
Income taxes$179 $233 







6




Notes to Financial Tables

1)The computation of basic and diluted earnings per common share is as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(in millions, except per share data)
Amounts attributable to Quest Diagnostics' common stockholders:
Net income attributable to Quest Diagnostics$226 $225 $649 $662 
Less: earnings allocated to participating securities1 2 3 4 
Earnings available to Quest Diagnostics' common stockholders - basic and diluted
$225 $223 $646 $658 
Weighted average common shares outstanding - basic112 112 111 112 
Effect of dilutive securities:
Stock options and performance share units1 2 1 2 
Weighted average common shares outstanding - diluted113 114 112 114 
Earnings per share attributable to Quest Diagnostics' common stockholders:
Basic$2.01 $1.99 $5.80 $5.87 
Diluted$1.99 $1.96 $5.74 $5.79 

2)The following tables reconcile reported GAAP results to non-GAAP adjusted results:
Three Months Ended September 30, 2024
(dollars in millions, except per share data)
Operating incomeOperating income as a percentage of net revenuesIncome tax expense (e)Equity in earnings of equity method investees, net of taxesNet income attributable to Quest DiagnosticsDiluted EPS
As reported$330 13.3 %$(65)$6 $226 $1.99 
Restructuring and integration charges (a)18 0.7 (3)— 15 0.13 
Other charges (b)5 0.2 — — 4 0.04 
Gains and losses on investments (c)— — — 2 2 0.02 
Other gains (d)— — 2 — (6)(0.06)
Amortization expense32 1.3 (8)— 24 0.21 
ETB— — (3)— (3)(0.03)
As adjusted$385 15.5 %$(77)$8 $262 $2.30 

7


Nine Months Ended September 30, 2024
(dollars in millions, except per share data)
Operating incomeOperating income as a percentage of net revenuesIncome tax expense (e)Equity in earnings of equity method investees, net of taxesNet income attributable to Quest DiagnosticsDiluted EPS
As reported$985 13.6 %$(205)$14 $649 $5.74 
Restructuring and integration charges (a)45 0.6 (10)— 35 0.31 
Other charges (b)12 0.2 — — 11 0.10 
Gains and losses on investments (c)— — (3)11 8 0.07 
Other gains (d)— — 2 — (6)(0.06)
Amortization expense90 1.2 (23)— 67 0.59 
ETB— — (6)— (6)(0.05)
As adjusted$1,132 15.6 %$(245)$25 $758 $6.70 
Three Months Ended September 30, 2023
(dollars in millions, except per share data)
Operating incomeOperating income as a percentage of net revenuesIncome tax expense (e)Equity in earnings of equity method investees, net of taxesNet income attributable to Quest DiagnosticsDiluted EPS
As reported$342 14.9 %$(68)$6 $225 $1.96 
Restructuring and integration charges (a)6 0.3 (1)— 5 0.05 
Other charges (b)5 0.2 — — 5 0.04 
Amortization expense27 1.2 (6)— 21 0.18 
ETB— — (2)— (2)(0.01)
As adjusted$380 16.6 %$(77)$6 $254 $2.22 
Nine Months Ended September 30, 2023
(dollars in millions, except per share data)
Operating incomeOperating income as a percentage of net revenuesIncome tax expense (e)Equity in earnings of equity method investees, net of taxesNet income attributable to Quest DiagnosticsDiluted EPS
As reported$995 14.3 %$(208)$18 $662 $5.79 
Restructuring and integration charges (a)32 0.5 (8)— 24 0.22 
Other charges (b)11 0.1 (2)— 9 0.08 
Gains and losses on investments (c)— — (1)3 2 0.02 
Amortization expense81 1.2 (20)— 61 0.53 
ETB— — (9)— (9)(0.08)
As adjusted$1,119 16.1 %$(248)$21 $749 $6.56 

8


(a)For both the three and nine months ended September 30, 2024 and 2023, the pre-tax impact represents costs primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business. The following table summarizes the pre-tax impact of restructuring and integration charges on our consolidated statements of operations:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(dollars in millions)
Cost of services$5 $2 $19 $12 
Selling, general and administrative15 4 28 20 
Other operating expense, net(2)— (2)— 
Operating income$18 $6 $45 $32 

(b)For the periods presented other operating expense, net includes pre-tax losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions. Additionally, for the nine months ended September 30, 2023, selling, general and administrative expenses includes the impairment of a corporate facility that was sold. The following table summarizes the pre-tax impact of these other items on our consolidated statements of operations:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(dollars in millions)
Selling, general and administrative$1 $1 $2 $7 
Other operating expense, net4 4 10 4 
Operating income$5 $5 $12 $11 
(c)For both the three and nine months ended September 30, 2024 and for the nine months ended September 30, 2023, the pre-tax impact represents gains and losses associated with changes in the carrying value of our strategic investments, recorded in equity in earnings of equity method investees, net of taxes.

(d)For the three and nine months ended September 30, 2024, other income (expense), net includes a non-recurring $8 million pre-tax gain associated with a foreign exchange forward contract utilized in conjunction with an acquisition.

(e)For restructuring and integration charges, gains and losses on investments, other charges and gains, and amortization expense, income tax impacts, where recorded, were primarily calculated using combined statutory income tax rates of 25.5% for both 2024 and 2023.

3)The outlook for adjusted diluted EPS represents management’s estimates for the full year 2024 before the impact of special items. Further impacts to earnings related to special items may occur throughout 2024. Additionally, the amount of ETB is dependent upon employee stock option exercises and our stock price, which are difficult to predict. The following table reconciles our 2024 outlook for diluted EPS under GAAP to our outlook for adjusted diluted EPS:

LowHigh
Diluted EPS$7.60 $7.70 
Restructuring and integration charges (a)0.34 0.34 
Amortization expense (b)0.85 0.85 
Other charges (c)0.12 0.12 
Gains and losses on investments (d)0.07 0.07 
Other gains (e)(0.06)(0.06)
ETB(0.07)(0.07)
Adjusted diluted EPS$8.85 $8.95 

9


(a)Represents estimated pre-tax charges of $50 million primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business. Income tax benefits were primarily calculated using a combined statutory income tax rate of 25.5%.

(b)Represents estimated pre-tax amortization expenses of $129 million. Income tax benefits were primarily calculated using a combined statutory income tax rate of 25.5%.

(c)Principally represents estimated pre-tax net losses of $13 million associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions. No income tax benefits are recorded on the losses associated with the contingent consideration accrual.

(d)Represents $11 million of pre-tax losses associated with changes in the carrying value of our strategic investments. Income tax impacts were calculated using a combined statutory income tax rate of 25.5%.

(e)Includes a non-recurring $8 million pre-tax gain associated with a foreign exchange forward contract utilized in conjunction with an acquisition. Income tax impacts on the gain were calculated using a combined statutory income tax rate of 25.5%.


10

v3.24.3
Cover
Oct. 22, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 22, 2024
Entity Registrant Name Quest Diagnostics Inc
Entity Incorporation, State or Country Code DE
Entity File Number 001-12215
Entity Tax Identification Number 16-1387862
Entity Address, Address Line One 500 Plaza Drive
Entity Address, City or Town Secaucus,
Entity Address, State or Province NJ
Entity Address, Postal Zip Code 07094
City Area Code (973)
Local Phone Number 520-2700
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.01 Par Value
Trading Symbol DGX
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001022079
Amendment Flag false
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