Executive Summary

Q4 2024 revenue grew 9.8% to $3.33B; adjusted EPS rose 5% to $3.45, while adjusted operating margin contracted 40 bps as expected due to Invitae dilution .
Diagnostics Laboratories and Biopharma Laboratory Services both delivered ~10% revenue growth; Diagnostics volume +6.8% and price/mix +3.4% drove breadth, while Biopharma margin expanded 140 bps to 17.0% .
2025 guidance targets 6.7–8.0% enterprise revenue growth, adjusted EPS of $15.60–$16.40, and FCF of $1.10–$1.25B; management expects margin expansion in both segments, with Invitae slightly accretive for the full year (2H accretive) .
Potential stock reaction catalysts: clear path to margin expansion (LaunchPad savings, Invitae tailwind in 2H), strong backlog conversion ($2.53B NTM), resilient diagnostics demand, and specialty/oncology test launches (MS monitoring, H5 bird flu, companion Dx) .

What Went Well and What Went Wrong

What Went Well

Diagnostics revenue +10.2% y/y to $2.59B; total volume +6.8% and price/mix +3.4% drove strength; AOI up to $359.5M (13.9% margin), with gains from organic demand and lab management agreements .
Biopharma revenue +10.4% y/y to $767.0M; AOI up to $130.8M and margin +140 bps to 17.0% on organic demand and LaunchPad savings; backlog remains robust at $7.99B, with $2.53B expected to convert in the next 12 months .
Strong cash generation: operating cash flow from continuing ops $777.2M and FCF $665.1M in Q4; CEO underscored momentum and confidence entering 2025 (“well positioned for continued growth”) .

What Went Wrong

Adjusted operating margin fell 40 bps to 12.7% (enterprise) due to Invitae; Diagnostics AOI margin -120 bps from Invitae plus unfavorable days and weather; management quantified ~$0.10 EPS weather impact embedded in Q1 2025 assumptions .
Higher adjusted tax rate: 22.4% in Q4 vs. 19.5% last year; 2025 adjusted tax rate guided to ~23%, reflecting geographic mix .
FX headwinds baked into 2025: enterprise ~50 bps, Diagnostics ~20 bps, Biopharma ~140 bps; Biopharma margin expansion pace to moderate vs. 2024 given FX and mix shift .

Financial Results

Consolidated Performance vs Prior Periods

Metric	Q4 2023	Q3 2024	Q4 2024
Total Revenue ($USD Billions)	$3.03	$3.30	$3.33
Operating Income ($USD Millions)	$(122.8)	$254	$216.5
Adjusted Operating Income ($USD Millions)	$394.9	$441	$423.2
Adjusted Operating Margin (%)	13.0%	13.4%	12.7%
Diluted EPS ($)	$(1.95)	$2.00	$1.70
Adjusted EPS ($)	$3.30	$3.50	$3.45
Operating Cash Flow – Continuing Ops ($USD Millions)	$579.6	$277	$777.2
Free Cash Flow – Continuing Ops ($USD Millions)	$412.4	$162	$665.1

Notes: Q4 revenue +9.8% y/y and adjusted EPS +$0.15 y/y; sequential AOI and margin softened due to Invitae mix and calendar/weather effects .

Segment Breakdown (Non-GAAP)

Segment	Metric	Q4 2023	Q3 2024	Q4 2024
Diagnostics Laboratories	Revenue ($USD Billions)	$2.35	$2.60	$2.59
	Adjusted Operating Income ($USD Millions)	$353.7	$387	$359.5
	Adjusted Operating Margin (%)	15.1%	15.2%	13.9%
Biopharma Laboratory Services	Revenue ($USD Millions)	$694.8	$738	$767.0
	Adjusted Operating Income ($USD Millions)	$109.0	$121	$130.8
	Adjusted Operating Margin (%)	15.7%	16.4%	17.0%

KPIs and Balance Sheet Highlights

KPI	Q3 2024	Q4 2024
Biopharma Backlog ($USD Billions)	$8.1	$7.99
TTM Book-to-Bill (x)	1.02	1.00
Next 12 Months Forecast Backlog Conversion ($USD Billions)	$2.6	$2.53
Cash and Cash Equivalents ($USD Billions)	$1.52 (prefunding noted)	$1.52
Total Debt ($USD Billions)	$6.8 (prefunding)	~$6.33 (LT + current)
Net Debt / TTM Adjusted EBITDA (x)	2.4x	2.2x

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Enterprise Revenue Growth (%)	FY 2025	N/A (first issuance)	6.7% to 8.0%	N/A
Diagnostics Revenue Growth (%)	FY 2025	N/A	6.5% to 7.7%	N/A
Biopharma Revenue Growth (%)	FY 2025	N/A	3.0% to 5.0%	N/A
Adjusted EPS ($)	FY 2025	N/A	$15.60 to $16.40	N/A
Free Cash Flow ($USD Billions)	FY 2025	N/A	$1.10 to $1.25	N/A
Adjusted Tax Rate (%)	FY 2025	N/A	~23%	N/A
FX Translation Assumption	FY 2025	N/A	Enterprise ~(0.5%), Diag ~(0.2%), Bio ~(1.4%)	N/A
Dividend per Share ($)	Declared Jan 8, 2025	Prior cadence not disclosed	$0.72, payable Mar 12, 2025	Maintained payout cadence

Management additionally guided to margin expansion in both segments in 2025 and embedded ~$0.10 EPS weather impact in Q1 assumptions .

Earnings Call Themes & Trends

Topic	Q2 2024 (Aug)	Q3 2024 (Oct)	Q4 2024 (Feb)	Trend
Margin trajectory / LaunchPad	Margins up slightly; LaunchPad $100–$125M offsetting labor; Diagnostics flat due to partner cyber event	Underlying margins +120 bps ex Invitae/weather/days; LaunchPad on track	Margin expansion expected in 2025; Invitae dilutive 1H, accretive full-year; LaunchPad continues	Improving underlying margins; dilution fades in 2H
Invitae integration	Accretive in 2025; >10% top-line growth; first 12 months dilutive ~3%	2024 Invitae -40 bps margin headwind; slightly accretive in 2025; integration tracking	Slightly accretive FY25; 2H accretive; cost actions and “best of” MRD assets	Integration progressing; accretive tailwind
Diagnostics demand/utilization	Organic base growth 4.5%; specialty focus; lab managed agreements drive mix	Volume/mix strength; esoteric faster than routine; share gains near hospital deals	Volume +6.8%, price/mix +3.4%; balanced growth (half organic, half acquisitions)	Sustained, above historic utilization
Biopharma orders/backlog	ED soft; Central Labs +9%; backlog $7.9B; TTM B2B 1.00	ED sequential improvement; backlog $8.1B; TTM B2B 1.02	Backlog $7.99B; NTM conversion $2.53B; quarterly B2B ~1.17; FX headwind in 2025	Healthy pipeline; FX headwinds manageable
Regulatory (PAMA/LDT)	Support SALSA; LDT rule challenge; limited financial impact; patient access concern	PAMA delay in 2025; base case assumes PAMA in 2026	LDT cost manageable; base case assumes PAMA 2026; working with trade orgs	Advocacy continues; limited near-term P&L impact
Tech/data products	Global Trial Connect launched; expanding precision oncology portfolio	Order-tracking visibility; Ovia Health expansion	Diagnostic Assistant “Smart trends”; Global Trial Connect enhancements	Ongoing digital enablement

Management Commentary

“In 2025, we are positioned to deliver strong growth and margin expansion across both Diagnostics Laboratories and Biopharma Laboratory Services” — Adam Schechter, CEO .
“Adjusted operating income was primarily due to organic demand and LaunchPad savings, partially offset by higher personnel costs” — Company release .
“We expect Invitae to be slightly accretive… dilutive to margins in the first half… accretive in the second half” — Adam Schechter .
“Our guidance range for adjusted EPS is $15.60 to $16.40… free cash flow $1.1B to $1.25B” — Julia Wang, CFO .
“Diagnostics margin was down due to Invitae and the unfavorable impact of days and weather” — Julia Wang .

Q&A Highlights

Margin cadence: Core Diagnostics margins would have increased ~50 bps ex Invitae/weather/days; tailwinds expected in 2025 from calendar and Invitae accretion in 2H .
Biopharma outlook: Central Labs solid; ED to grow y/y from Q4; 2025 Biopharma 3–5% growth with 140 bps FX headwind; Q1 is lowest margin quarter seasonally .
Capital allocation/M&A: Healthy pipeline focused on hospital/regional labs; leverage ~2.2x; ~$1.3B buyback authorization outstanding .
Diagnostics organic/inorganic split: 2025 Diagnostics growth balanced—~3.5% organic and ~3.5% from 2024 acquisitions; esoteric segments (oncology, women’s health, neurology, autoimmune) outgrow routine .
Weather impact: ~$0.10 EPS impact built into Q1 guidance; calendar largely neutral for FY25 with one less revenue day offset by one less payroll day .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable during this session; comparisons to estimates could not be performed. Values were intended to be retrieved from S&P Global but were not accessible due to request limits.
Given lack of consensus data, we do not assess beats/misses. We note results featured y/y revenue growth (+9.8%), adjusted EPS up 5%, and segment margins mixed (Diagnostics down due to Invitae; Biopharma up 140 bps), which may prompt estimate revisions focused on 2025 margin expansion trajectory .

Key Takeaways for Investors

Diagnostics growth breadth and durable demand, plus specialty/oncology expansion, underpin 2025 top-line with balanced organic/inorganic contribution; watch for continued market share gains linked to hospital partnerships .
Margin story improves through 2025: LaunchPad savings, easing Invitae dilution (2H accretive), and calendar tailwinds support enterprise margin expansion; FX remains a manageable headwind .
Biopharma backlog supports visibility; ED recovery underway; monitor book-to-bill and NTM conversion ($2.53B) to gauge throughput and pricing dynamics .
Strong cash generation and flexible balance sheet (2.2x net leverage) enable ongoing M&A (hospital/regional labs, oncology assets) and buybacks; dividend maintained ($0.72) .
Regulatory backdrop (LDT, PAMA) appears limited for near-term P&L; base case assumes PAMA in 2026; incremental upside if delayed again .
Near-term trading: narrative likely centers on 2025 margin expansion credibility and Invitae accretion timing; mid-term thesis: diagnostics scale plus specialty mix, disciplined M&A and biopharma resilience support EPS and FCF compounding .

Additional Press Releases Relevant to the Period

Liquid biopsy expansion: Labcorp Plasma Complete (ctDNA-based comprehensive genomic profiling) clinical availability announced Feb 24, 2025, enhancing oncology portfolio .
Oncology asset acquisition: Agreement to acquire select BioReference Health oncology testing assets (~$85–$100M annual revenue; up to $225M purchase price), expected accretive in year one .

LABCORP HOLDINGS INC. (LH)·Q4 2024 Earnings Summary