Labcorp is a global leader in laboratory services, operating through two main segments: Diagnostics Laboratories (Dx) and Biopharma Laboratory Services (BLS) **[0000920148-24-000014_lh-20231231.htm:16]** **[0000920148-24-000014_lh-20231231.htm:11]** **[0000920148-24-000014_lh-20231231.htm:151]**. The company provides a wide range of laboratory testing services, including routine and specialty/esoteric testing, and is heavily involved in the development of new drugs, having worked on 90% of the new drugs approved by the FDA in 2023 **[0000920148-24-000014_lh-20231231.htm:11]**. Labcorp's strategic focus includes expanding its specialty testing capabilities in areas such as oncology, women's health, autoimmunology, and neurology **[0001193125-24-087342_d545034ddef14a.htm:1]**.

1. **Diagnostics Laboratories (Dx)** - Offers routine and specialty/esoteric testing services, with nearly all revenues generated in the U.S. This segment is a major contributor to the company's revenue **[0000920148-24-000014_lh-20231231.htm:16]** **[0000920148-24-000014_lh-20231231.htm:11]** **[0000920148-24-000014_lh-20231231.htm:151]**.
2. **Biopharma Laboratory Services (BLS)** - Focuses on early development research laboratories and central laboratory services, with revenues nearly evenly split between the U.S. and other countries **[0000920148-24-000014_lh-20231231.htm:16]** **[0000920148-24-000014_lh-20231231.htm:11]** **[0000920148-24-000014_lh-20231231.htm:151]**.

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0ec70a00761542537d219396692ad2d7efe6b7f847e4f9e33641f770b5ac3484

2fcca8d2f91ecdf1cf8bcec80c8c5f66890814c05739f7937b55bc86fb7afd45

| Metric [Unit: $ million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|--------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Diagnostics Laboratories (Dx)** | **2,300**  **[LH_3228521_3]**  | **2,400**  **[LH_3247198_2]**  | **2,300**  **[LH_3255766_4]**  | **2,344.7**  **[0000920148-23-000081_lh-20230930.htm:30]**  | **2,300**  **[LH_3373503_4]**  | **2,479.7**  **[0000920148-24-000032_lh-20240331.htm:28]** **[0000920148-24-000032_lh-20240331.htm:33]**  | **2,520**  **[0000920148-24-000099_lh-20240630.htm:37]**  | **2,553.5**  **[0000920148-24-000118_lh-20240930.htm:38]**  |
| **Biopharma Laboratory Services (BLS)** | **1,400**  **[LH_3228521_3]**  | **1,400**  **[LH_3247198_3]**  | **699**  **[LH_3255766_4]**  | **719.1**  **[0000920148-23-000081_lh-20230930.htm:30]**  | **695**  **[LH_3373503_4]**  | **710.9**  **[0000920148-24-000032_lh-20240331.htm:28]** **[0000920148-24-000032_lh-20240331.htm:33]**  | **707**  **[0000920148-24-000096_form8-kerex991for2q24.htm:4]**  | **737.7**  **[0000920148-24-000115_form8-kerex991for3q24.htm:6]**  |
| **Total Revenue** | **3,700**  **[0000920148-23-000012_former2162023ex991forq42022.htm:0]**  | **3,800**  **[LH_3247198_2]**  | **3,000**  **[LH_3255766_0]** **[LH_3383347_2]**  | **3,056.8**  **[0000920148-23-000081_lh-20230930.htm:30]**  | **3,030**  **[0000920148-24-000009_former2152024ex991forq42023.htm:0]**  | **3,176.6**  **[0000920148-24-000032_lh-20240331.htm:28]** **[0000920148-24-000032_lh-20240331.htm:33]**  | **3,220**  **[0000920148-24-000096_form8-kerex991for2q24.htm:2]**  | **3,282**  **[0000920148-24-000118_lh-20240930.htm:38]**  |

bb6f8e9a885a933e46e7712622b694f77d85ff42c86e0b4852c871dc4840ee47

1. Given the substantial growth of Labcorp OnDemand but its current immaterial impact on revenue, when do you anticipate this platform reaching a scale significant enough to break out its financials, and what are the main obstacles to achieving that critical mass?

2. With Walgreens planning to close numerous stores and considering you have about 400 patient service centers within their locations, how do you intend to mitigate the potential impact on patient access and volumes, and what strategies are in place to ensure continuity of services in affected areas?

3. The acquisition of Invitae has resulted in a margin decline this quarter, with expectations of slight earnings accretion only in 2025; can you elaborate on the integration challenges you're facing and how confident are you in achieving the projected top-line growth and margin improvement?

4. You've mentioned ongoing strain in the employer testing-related business with no significant positive outlook for 2025; what strategic actions are you taking to address this underperforming segment, and is divestiture being considered to improve overall business performance?

5. Despite underlying improvements, adjusted operating margins in the Diagnostics segment were negatively impacted by Invitae, weather, and calendar days; how sustainable are your margin improvement initiatives, and what measures are you implementing to mitigate such external factors affecting your profitability?

d91ca51a7b8c30ef47fd1d15ae510f9cfadda566c92161acd9526a7b637a2f7f

5bc19f50af65b0aa9d0febae5edad8cd5ef60a907c98cb33bb93305a3a6081f1

- Reimbursable Out-of-Pocket Expenses

Intercompany Eliminations

Other

Total Revenue

7db2aa97b84b676b65df00d063ee998ae18ce32fd9d2e3f6426ba4cd1a217dcd

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

d89a86925eaf828d9c62cc467fc0a876086ed60440104c759faa61654c7bf2a7

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Enterprise Revenue Growth**: Expected to grow **6.6% to 7.3%** compared to 2023  **[LH_3403591_5]** .
  2. **Diagnostics Revenue Growth**: Expected to be up **7.2% to 7.8%** compared to 2023  **[LH_3403591_5]** .
  3. **Biopharma Revenue Growth**: Expected to grow **4.7% to 5.6%** compared to 2023  **[LH_3403591_5]** .
  4. **Adjusted EPS**: Guidance range is **$14.30 to $14.70**  **[LH_3403591_5]** .
  5. **Free Cash Flow**: Guidance range is **$850 million to $980 million**  **[LH_3403591_5]** .
  6. **Enterprise Margins**: Expected to be slightly down year-over-year  **[LH_3403591_5]** .
  7. **Capital Expenditures**: Expected to be approximately **3.5% of revenue** for the full year  **[LH_3403591_4]** .
  8. **Adjusted Tax Rate**: Expected to be approximately **23%** for the full year  **[LH_3403591_4]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Adjusted EPS**: Guidance range is **$14.30 to $14.90**  **[LH_3395647_5]** .
  2. **Free Cash Flow**: Guidance range is **$850 million to $1 billion**  **[LH_3395647_5]** .
  3. **Enterprise Revenue Growth**: Expected to grow **6.4% to 7.5%** compared to 2023  **[LH_3395647_4]** .
  4. **Diagnostics Revenue Growth**: Expected to be up **6.9% to 7.9%** compared to 2023  **[LH_3395647_4]** .
  5. **Biopharma Revenue Growth**: Expected to grow **3.7% to 5%** compared to 2023  **[LH_3395647_4]** .
  6. **Enterprise Margins**: Expected to be flat versus the prior year  **[LH_3395647_4]** .
  7. **Diagnostics Margins**: Expected to be down  **[LH_3395647_4]** .
  8. **Capital Expenditures**: Expected to be approximately **3.5% of revenue** for the full year  **[LH_3395647_3]** .
  9. **Adjusted Tax Rate**: Expected to be approximately **23%** for the full year  **[LH_3395647_3]** .
  10. **Invitae Revenue Contribution**: Expected to add approximately **$120 million** in revenue for the remainder of the year  **[LH_3395647_4]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Enterprise Revenue Growth**: Expected to grow **4.8% to 6.4%** compared to 2023  **[LH_3380701_4]** .
  2. **Diagnostics Revenue Growth**: Expected to be up **4.8% to 6%** compared to 2023  **[LH_3380701_4]** .
  3. **Biopharma Revenue Growth**: Expected to grow **3.7% to 5.7%** compared to 2023  **[LH_3380701_4]** .
  4. **Adjusted EPS**: Guidance range is **$14.45 to $15.35**  **[LH_3380701_4]** .
  5. **Free Cash Flow**: Guidance range is **$1 billion to $1.15 billion**  **[LH_3380701_4]** .
  6. **Adjusted Tax Rate**: Expected to be approximately **23%** for the full year  **[LH_3380701_3]** .
  7. **Capital Expenditures**: Expected to be approximately **3.5% of revenue** for the full year  **[LH_3380701_3]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Enterprise Revenue Growth**: Expected to grow **4.7% to 6.5%** compared to 2023  **[LH_3373503_4]** .
  2. **Diagnostics Revenue Growth**: Expected to be up **3.2% to 4.8%** compared to 2023  **[LH_3373503_4]** .
  3. **Biopharma Revenue Growth**: Expected to grow **5.5% to 7.5%** compared to 2023  **[LH_3373503_4]** .
  4. **Adjusted EPS**: Guidance range is **$14.30 to $15.40**  **[LH_3373503_4]** .
  5. **Free Cash Flow**: Expected to be between **$1 billion to $1.15 billion**  **[LH_3373503_5]** .
  6. **Margins**: Expected to improve in both Diagnostics and Biopharma segments  **[LH_3373503_4]** .
  7. **Adjusted Tax Rate**: Expected to be approximately **23%** for 2024  **[LH_3373503_3]** .
  8. **Capital Expenditures**: Expected to be approximately **3.5%** of revenue in 2024  **[LH_3373503_3]** .
  9. **Impact of Weather**: Expected to impact earnings by **$0.10 to $0.15** in the first quarter  **[LH_3373503_4]** .

0d610a006d89b37073848c48d9ef0e164d528f62831459076ee74f8fa4b717fe

North America

- United States

- Canada

Europe

- United Kingdom

- Switzerland

- Other Europe

Other Regions

6b52bac80dfc317dfa60bb37a3cd67e32d631658703e9dfb24a7874c86e1a514

Company organic revenue (percentage)

Company organic Base Business (percentage)

Company COVID-19 Testing (percentage)

Dx organic revenue (percentage)

Dx base business (percentage)

Dx COVID-19 Testing (percentage)

Dx total volume measured by requisitions (percentage)

Dx acquisition volume net of divestitures (percentage)

Dx organic volume (percentage)

Dx base business volume (percentage)

Dx COVID-19 Testing volume (percentage)

Dx price/mix (percentage)

Dx base business price/mix (percentage)

BLS organic growth (percentage)

Company base business (percentage)

85516ce3ae1280b9d65b186c241f1c7c3a8548c4441eda1ba1ef708c627079cc

| Name                  | Position                                                                 | Start Date          | Short Bio                                                                                                                                                                                                 |
|-----------------------|--------------------------------------------------------------------------|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Adam H. Schechter     | President and Chief Executive Officer                                    | November 2019       | Adam H. Schechter has served as a director of Labcorp since April 2013. He became the President and CEO in November 2019 and Chairman of the Board in May 2020. Previously, he held leadership roles at Merck & Co., Inc.  **[0001193125-24-087342_d545034ddef14a.htm:47]** **[0001193125-23-084648_d572204ddef14a.htm:39]** .               |
| Glenn A. Eisenberg    | Executive Vice President and Chief Financial Officer                     | June 2014           | Glenn A. Eisenberg has served as EVP and CFO since June 2014. He will transition to Special Advisor to the CEO on December 2, 2024, until his retirement on April 30, 2025  **[0001193125-24-087342_d545034ddef14a.htm:56]** **[0000920148-24-000121_lh-20241115.htm:1]** .                                                             |
| Megan D. Bailey       | Executive Vice President and Chief Strategy and Transformation Officer   | May 2023            | Megan D. Bailey has served in her current role since May 2023. Previously, she was Chief of Staff to the CEO and an Executive Committee member starting in July 2022. She was CEO of Personal Genome Diagnostics from April 2020 to July 2022  **[0001193125-24-087342_d545034ddef14a.htm:55]** **[0001127602-23-014877_xslF345X02/form3.xml:0]** . |
| Lance V. Berberian    | Executive Vice President and Chief Information and Technology Officer    | February 15, 2020   | Lance V. Berberian has served as EVP and Chief Information and Technology Officer since February 2020. Previously, he was Senior Vice President and Chief Information Officer from February 2014  **[0001193125-24-087342_d545034ddef14a.htm:55]** **[0001193125-23-084648_d572204ddef14a.htm:48]** .                                        |
| Brian J. Caveney      | Executive Vice President and President, Early Development Research Laboratories and Chief Medical and Scientific Officer | May 2023 | Brian J. Caveney has held his current position since May 2023. He joined Labcorp in September 2017 as Senior Vice President and Chief Medical Officer  **[0001193125-24-087342_d545034ddef14a.htm:55]** **[0000920148-23-000036_lh-20230501.htm:0]** **[0001193125-23-084648_d572204ddef14a.htm:48]** .                                          |
| Anita Z. Graham       | Executive Vice President and Chief Human Resources Officer               | April 2023          | Anita Z. Graham has served as EVP and Chief Human Resources Officer since April 2023. Previously, she held senior HR roles at VF Corporation, ADT Corporation, and Shire plc  **[0001193125-24-087342_d545034ddef14a.htm:57]** .                                                               |
| Mark S. Schroeder     | Executive Vice President and President, Diagnostics Laboratories and Chief Operations Officer | May 2023 | Mark S. Schroeder has served in his current role since May 2023. He joined Labcorp in May 2007 and has held various leadership positions, including Chief Supply Chain Officer  **[0001193125-24-087342_d545034ddef14a.htm:57]** **[0000920148-23-000035_lh-20230501.htm:0]** **[0001193125-23-084648_d572204ddef14a.htm:50]** .                  |
| Amy B. Summy          | Executive Vice President and Chief Marketing Officer                     | March 2, 2020       | Amy B. Summy has served as EVP and Chief Marketing Officer since March 2020. Previously, she was a Partner and Marketing & Insights Practice Leader at Ernst & Young LLP  **[0001193125-23-084648_d572204ddef14a.htm:51]** .                                                                  |
| Sandra D. van der Vaart| Executive Vice President, Chief Legal Officer, Chief Compliance Officer, and Corporate Secretary | February 2020 | Sandra D. van der Vaart has served in her current role since February 2020. She has held various positions within Labcorp's legal department since January 2001  **[0001193125-24-087342_d545034ddef14a.htm:58]** .                                      |
| Peter J. Wilkinson    | Senior Vice President and Chief Accounting Officer                       | April 2019          | Peter J. Wilkinson has served as SVP and Chief Accounting Officer since April 2019. Previously, he held positions such as EVP and CFO of Syneos Health, Inc.'s clinical division  **[0001193125-24-087342_d545034ddef14a.htm:58]** **[0001193125-23-084648_d572204ddef14a.htm:51]** .                |
| Julia Wang            | Executive Vice President and Chief Financial Officer                     | December 2, 2024    | Julia Wang was appointed as EVP and CFO effective December 2, 2024. She previously served as CFO at BeiGene, Ltd. and held leadership roles at Alexion Pharmaceuticals, Quest Diagnostics, and Johnson & Johnson  **[0000920148-24-000121_lh-20241115.htm:1]** .                           |

be68380b8360ad3e563492d8df9a8477493cb8aeff510cd298067242ba4c2192

| Program Details            | Program 1          |
|----------------------------|--------------------|
| Approval Date              | July 24, 2024  **[0000920148-24-000118_lh-20240930.htm:56]** **[0000920148-24-000118_lh-20240930.htm:16]** **[0000920148-24-000118_lh-20240930.htm:46]**  |
| End Date/Duration          | No expiration date  **[0000920148-24-000118_lh-20240930.htm:56]**  |
| Total additional amount    | **$1,000.0 million**  **[0000920148-24-000118_lh-20240930.htm:56]** **[0000920148-24-000118_lh-20240930.htm:16]** **[0000920148-24-000118_lh-20240930.htm:46]**  |
| Remaining authorization amount | **$1,355.4 million** as of September 30, 2024  **[0000920148-24-000118_lh-20240930.htm:56]** **[0000920148-24-000118_lh-20240930.htm:16]** **[0000920148-24-000118_lh-20240930.htm:46]**  |
| Details                    | Part of strategy to return capital to shareholders, following Fortrea spin-off  **[LH_3383347_2]**  |

a83c0460f4a138300a41a7b08b4870f3d9feff7fc0fa4eb6e2caf6b25a867470

**Annual guidance for FY 2024:**
- Enterprise Revenue Growth: 6.6% to 7.3%  **[LH_3403591_5]**  (no change from 6.4% to 7.5%  **[LH_3395647_4]** )  
- Diagnostics Revenue Growth: 7.2% to 7.8%  **[LH_3403591_5]**  (raised from 6.9% to 7.9%  **[LH_3395647_4]** )  
- Biopharma Revenue Growth: 4.7% to 5.6%  **[LH_3403591_5]**  (raised from 3.7% to 5.0%  **[LH_3395647_4]** )  
- Adjusted EPS: $14.30 to $14.70  **[LH_3403591_5]**  (lowered from $14.30 to $14.90  **[LH_3395647_5]** )  
- Free Cash Flow: $850M to $980M  **[LH_3403591_5]**  (lowered from $850M to $1B  **[LH_3395647_5]** )  
- Enterprise Margins: slightly down year-over-year  **[LH_3403591_5]**  (lowered from flat versus the prior year  **[LH_3395647_4]** )  
- Capital Expenditures: ~3.5% of revenue  **[LH_3403591_4]**  (no change from ~3.5% of revenue  **[LH_3395647_3]** )  
- Adjusted Tax Rate: ~23%  **[LH_3403591_4]**  (no change from ~23%  **[LH_3395647_3]** )  

49b45bf5bc38fe49671f0370ac4019ca79f25d3c6c2e3e11d4971e1b7adc15e5

| Name                        | Start Date       | End Date       | Reason for Change                                                                 |
|-----------------------------|------------------|----------------|-----------------------------------------------------------------------------------|
| Deloitte & Touche LLP       | November 2, 2020  **[0001193125-20-287013_d141788d8k.htm:1]**  | Present        | Current auditor.                                                                  |
| PricewaterhouseCoopers LLP  | N/A              | December 31, 2020  **[0001193125-20-287013_d141788d8k.htm:1]**  | The change was the result of a competitive process conducted by the Audit Committee.  **[0001193125-20-287013_d141788d8k.htm:1]**  |

fdc08b74152b2547d52d1b18fd515ecc619950343d1589137d2c4c7e01e08f9e

b3ef6423bef2595ee5531cfe924889350a13c8fde9c9c797731cefff9ba3d8f7

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $3,282M (+7% YoY)  **[0000920148-24-000118_lh-20240930.htm:33]** **[0000920148-23-000081_lh-20230930.htm:30]**   
- Dx Segment: $2,553.5M (+9% YoY)  **[0000920148-24-000118_lh-20240930.htm:33]** **[0000920148-23-000081_lh-20230930.htm:30]**   
- Europe: $295.4M (+7% YoY)  **[0000920148-24-000118_lh-20240930.htm:8]** **[0000920148-23-000081_lh-20230930.htm:9]**   
- Other Regions: $148.2M (+13% YoY)  **[0000920148-24-000118_lh-20240930.htm:8]** **[0000920148-23-000081_lh-20230930.htm:9]**   
- Operating Income: $254.1M (**+5%** YoY)  **[0000920148-24-000118_lh-20240930.htm:2]** **[0000920148-23-000081_lh-20230930.htm:2]**   
- Net Income: $169.3M (**-8%** YoY)  **[0000920148-24-000118_lh-20240930.htm:2]** **[0000920148-23-000081_lh-20230930.htm:2]**   
- EPS (Diluted): $2.00 (**-6%** YoY)  **[0000920148-24-000118_lh-20240930.htm:2]** **[0000920148-23-000081_lh-20230930.htm:2]**   

725f0defe139b8881d298fffb8ca9e456643a667cc12655a95410417f4490092

b76310fd0f6567733eb6b1ece75e18358472336a0159e4edcad889953cc39ceb

1. **Margin Outlook**  
   **Q:** Will margins improve in 2024?  
   **A:** Management expects margins to increase across both Diagnostics and Biopharma businesses in 2024, despite a **$130 million** headwind from decreased COVID-related revenue.  **[LH_3373503_15]** **[LH_3373503_18]**  Volume growth and cost reductions from the LaunchPad initiative, targeting **$100 to $125 million** in annual savings, are anticipated to drive margin improvement.  **[LH_3373503_15]** **[LH_3373503_18]** 

2. **Biopharma Growth & Bookings**  
   **Q:** What is the outlook for Biopharma bookings and growth?  
   **A:** Biopharma services are expected to grow **5.5% to 7.5%** in 2024, with strong RFPs and win rates, particularly in the Central Laboratory segment.  **[LH_3373503_8]** **[LH_3373503_14]**  Early Development is also projected to improve, especially in the second half of the year, despite prior cancellations from smaller biotech clients.  **[LH_3373503_8]** **[LH_3373503_14]** **[LH_3373503_19]** 

3. **Capital Allocation & M&A**  
   **Q:** Are there plans for larger M&A deals?  
   **A:** The M&A pipeline remains strong, with opportunities in multiple health systems that, combined, can be meaningful.  **[LH_3373503_6]**  Inorganic growth expectations have increased from **1-2%** to **1.5-2.5%**, reflecting significant opportunities.  **[LH_3373503_6]** **[LH_3373503_12]** 

4. **Diagnostics Volume Growth**  
   **Q:** How are diagnostics volumes trending?  
   **A:** Diagnostics Base Business grew **8%** in the fourth quarter, with momentum expected to continue into 2024.  **[LH_3373503_10]** **[LH_3373503_12]**  Growth is driven by both routine and esoteric testing, focusing on core therapeutic areas like oncology and women's health.  **[LH_3373503_12]** **[LH_3373503_25]** 

5. **COVID Headwinds & Cost Reduction**  
   **Q:** How will COVID headwinds impact margins?  
   **A:** A **$130 million** reduction in COVID-related margins is expected in 2024, but this will be offset by business growth and cost savings from the LaunchPad initiative.  **[LH_3373503_15]** **[LH_3373503_18]**  The company remains confident in achieving margin improvement despite this headwind.  **[LH_3373503_15]** **[LH_3373503_18]** 

6. **Regulatory Environment (PAMA & SALSA)**  
   **Q:** What is the outlook on PAMA and SALSA legislation?  
   **A:** Management is optimistic that SALSA will pass, potentially delaying PAMA cuts.  **[LH_3373503_11]** **[LH_3373503_18]**  If not passed, PAMA impacts could occur in 2025, and they are actively working with trade organizations to find legislative solutions.  **[LH_3373503_11]** **[LH_3373503_18]** 

7. **Labor Costs & Inflation**  
   **Q:** How is labor cost inflation being managed?  
   **A:** Labor inflation is expected to be around **3% to 4%**, approximately a **$100 million** increase.  **[LH_3373503_16]** **[LH_3373503_18]**  The LaunchPad initiative aims to offset these costs with **$100 to $125 million** in annual savings.  **[LH_3373503_16]** **[LH_3373503_18]** 

8. **Share Buybacks & Debt Refinancing**  
   **Q:** What are the plans for share buybacks and debt?  
   **A:** Free cash flow will be allocated to M&A, share repurchases, and dividends.  **[LH_3373503_6]** **[LH_3373503_17]**  The company plans to refinance **$1 billion** of debt due in late 2024, maintaining leverage within the targeted **2.5x to 3x** range.  **[LH_3373503_15]** **[LH_3373503_17]** 

9. **Esoteric Testing Growth**  
   **Q:** Will esoteric testing continue strong growth?  
   **A:** Both routine and esoteric testing volumes grew strongly, with esoteric slightly outpacing routine.  **[LH_3373503_12]** **[LH_3373503_25]**  Management expects this trend to continue, driven by focus on key therapeutic areas.  **[LH_3373503_25]** 

10. **Tax Rate Outlook**  
    **Q:** What is the expected tax rate for 2024?  
    **A:** The adjusted tax rate is expected to be around **23%**, reflecting increased R&D investments and a favorable geographic earnings mix.  **[LH_3373503_20]** **[LH_3373503_21]** **[LH_3373503_22]** 

11. **NHP Pricing & Supply**  
    **Q:** How does NHP pricing affect margins?  
    **A:** NHP supply is sufficient, and pricing has decreased, which is beneficial as costs are passed through to clients.  **[LH_3373503_9]**  Lower NHP costs may slightly improve margins, despite potential revenue decline from reduced pass-through costs.  **[LH_3373503_9]** **[LH_3373503_19]** 

12. **Ovia Women's Health Offering**  
    **Q:** What's the significance of the Ovia announcement?  
    **A:** The Ovia acquisition expands digital capabilities in women's health, offering fertility and family-building benefits to patients and employers.  **[LH_3373503_13]** **[LH_3373503_12]**  This aligns with the company's focus on growth in key therapeutic areas.  **[LH_3373503_13]** **[LH_3373503_12]** 

d47e9a651dfd845d6023bf87107ec37f0b8a6c8dd71d76c17071a0fedcd2d1e3

- **Integration of Invitae is going extremely well**, and it's expected to be **slightly accretive to earnings in 2025** with revenue growth of approximately **10%**  **[LH_3403591_8]** **[LH_3403591_14]** .
- **Oncology offerings are growing faster than the overall diagnostics business**, with **esoteric testing** outpacing routine testing, making it a significant area of focus for future growth  **[LH_3403591_17]** .
- **Increased inorganic growth expectations from 1-2% to 1.5-2.5%** in the long-term guidance, reflecting confidence in a **strong M&A pipeline**, particularly in hospital and regional laboratories  **[LH_3403591_29]** **[LH_3403591_10]** .

1a637fe3f7eb8829fe32cd948e7818cbdb98423e7ef7660f31263a7d6cd19c84

| Year | Amount Due (in millions) | Debt Type         | Interest Rate (%) | % of Total Debt                                                                 |
|----------|------------------------------|-----------------------|-----------------------|------------------------------------------------------------------------------------|
| 2024     | $400.0 **[0000920148-24-000118_lh-20240930.htm:14]**               | 2.30% Senior Notes    | 2.30 **[0000920148-24-000118_lh-20240930.htm:14]**          | 5.9% = (400.0 / 6,752.0) * 100 **[0000920148-24-000118_lh-20240930.htm:14]**                                            |
| 2025     | $1,000.0 **[0000920148-24-000118_lh-20240930.htm:14]**             | 3.60% Senior Notes    | 3.60 **[0000920148-24-000118_lh-20240930.htm:14]**          | 14.8% = (1,000.0 / 6,752.0) * 100 **[0000920148-24-000118_lh-20240930.htm:14]**                                         |
| 2026     | $500.0 **[0000920148-24-000118_lh-20240930.htm:14]**               | 1.55% Senior Notes    | 1.55 **[0000920148-24-000118_lh-20240930.htm:14]**          | 7.4% = (500.0 / 6,752.0) * 100 **[0000920148-24-000118_lh-20240930.htm:14]**                                           |
| 2027     | $600.0 **[0000920148-24-000118_lh-20240930.htm:14]**               | 3.60% Senior Notes    | 3.60 **[0000920148-24-000118_lh-20240930.htm:14]**          | 8.9% = (600.0 / 6,752.0) * 100 **[0000920148-24-000118_lh-20240930.htm:14]**                                           |
| 2029     | $650.0 **[0000920148-24-000118_lh-20240930.htm:14]**               | 2.95% Senior Notes    | 2.95 **[0000920148-24-000118_lh-20240930.htm:14]**          | 9.6% = (650.0 / 6,752.0) * 100 **[0000920148-24-000118_lh-20240930.htm:14]**                                           |
| 2030     | $650.0 **[0000920148-24-000118_lh-20240930.htm:14]**               | 4.35% Senior Notes    | 4.35 **[0000920148-24-000118_lh-20240930.htm:14]**          | 9.6% = (650.0 / 6,752.0) * 100 **[0000920148-24-000118_lh-20240930.htm:14]**                                           |
| 2031     | $442.9 **[0000920148-24-000118_lh-20240930.htm:14]**               | 2.70% Senior Notes    | 2.70 **[0000920148-24-000118_lh-20240930.htm:14]**          | 6.6% = (442.9 / 6,752.0) * 100 **[0000920148-24-000118_lh-20240930.htm:14]**                                           |
| 2032     | $500.0 **[0000920148-24-000118_lh-20240930.htm:14]**               | 4.55% Senior Notes    | 4.55 **[0000920148-24-000118_lh-20240930.htm:14]**          | 7.4% = (500.0 / 6,752.0) * 100 **[0000920148-24-000118_lh-20240930.htm:14]**                                           |
| 2034     | $850.0 **[0000920148-24-000118_lh-20240930.htm:14]**               | 4.80% Senior Notes    | 4.80 **[0000920148-24-000118_lh-20240930.htm:14]**          | 12.6% = (850.0 / 6,752.0) * 100 **[0000920148-24-000118_lh-20240930.htm:14]**                                          |
| 2045     | $900.0 **[0000920148-24-000118_lh-20240930.htm:14]**               | 4.70% Senior Notes    | 4.70 **[0000920148-24-000118_lh-20240930.htm:14]**          | 13.3% = (900.0 / 6,752.0) * 100 **[0000920148-24-000118_lh-20240930.htm:14]**                                          |

0c64f14701214d0fc107ec0a40cd2fa186da78b6650dc86d7fcd86d8e353327d

- **Higher turnover among frontline employees in diagnostics is leading to increased costs to retain employees**, impacting margins; although turnover is improving, it's still higher than pre-pandemic levels.  **[LH_3380701_24]**
- **Lab management agreements begin with margins lower than the company's average and have an initial negative impact on overall margins**, and although margins improve over time, they never reach the company's average margins.  **[LH_3380701_14]**
- **Revenue growth in the early development business is below historical levels due to challenges in the biotech sector**, affecting both NHP and non-NHP areas, causing underperformance in this segment.  **[LH_3380701_15]**

88137ea1ffa125b9a710c78ba26280ac583b6b9bfc10dbeadaf573a1557c39ac

- LabCorp has strong momentum in its **Diagnostics business**, focusing on **four high-growth therapeutic areas: oncology, women's health, autoimmune disease, and neurology**, which are expected to grow disproportionately and drive continued growth in both routine and esoteric testing, with esoteric testing growing slightly faster.  **[LH_3373503_12]** **[LH_3373503_25]**
- The acceleration of **hospital and local laboratory partnerships** is enabling LabCorp to grow faster than in the past, with a **strong pipeline** of future partnerships. They have increased their longer-term inorganic growth guidance to **1.5% to 2.5%**, up from 1% to 2%, and these partnerships are **accretive in the first year** and expected to improve margins over time.  **[LH_3373503_12]** **[LH_3373503_18]**
- LabCorp expects **margin improvement across both Diagnostics and Biopharma** businesses in 2024, driven by top-line growth, **cost-saving initiatives** like the LaunchPad program, and normalization of prior headwinds such as early development cancellations and COVID impacts. They are confident in improving margins despite a **COVID-related revenue headwind of approximately $130 million**, and lower Non-Human Primate (NHP) costs could **help margins**.  **[LH_3373503_26]** **[LH_3373503_7]** **[LH_3373503_19]** **[LH_3373503_15]**

b1a2f35c487b01a8080dbcb53c12e656d5b7439392fcadf53d5ea43c4cddef69

- **Labcorp's Diagnostics revenue increased by 8%**, driven by a **6% increase in volume** and **2% in price/mix**, attributed to strong execution, strategic partnerships with hospitals and laboratories, increased tests per accession, and a shift towards specialty testing.  **[LH_3395647_15]**
- **Early Development is showing signs of recovery**, with **higher orders and lower cancellations**, leading to expected **sequential revenue growth in the second half** and **year-over-year growth beginning in the fourth quarter**.  **[LH_3395647_21]**
- **Labcorp increased its full-year outlook**, excluding Invitae, due to strong performance in Diagnostics and Central Labs, demonstrating confidence in the **underlying business growth**.  **[LH_3395647_12]**

952f2f3f810ffed5955edad2f1fdea2b859c031a1c026d0fede80cf062f4aeb6

1. **Invitae Acquisition Strategic Fit**  
   **Q:** What's the strategic value of acquiring Invitae's assets?  
   **A:** Adam Schechter explained that Invitae's assets significantly augment LabCorp's oncology business, especially in hereditary oncology, which is much larger than their current business. The acquisition accelerates their capabilities and enhances their focus on specialty testing in rare diseases. Invitae also brings a strong NGS platform and talented workforce, which LabCorp can leverage to develop the best platform possible. Acquiring these assets at a reasonable deal makes it a strategic fit for LabCorp.  **[LH_3380701_5]** 

2. **Invitae Acquisition Financial Impact**  
   **Q:** Will Invitae acquisition impact earnings, and how will you manage dilution?  
   **A:** Glenn Eisenberg acknowledged that in the near term, the acquisition will be dilutive due to Invitae's high cost structure, but they plan to leverage LabCorp's infrastructure to improve profitability. By leveraging cost synergies, especially in sales, marketing, and G&A expenses, they expect to make the business profitable within the first year. They anticipate the acquisition to be accretive in the second full year of ownership and exceed their cost of capital in year three, delivering an attractive return on investment.  **[LH_3380701_6]** 

3. **Biopharma Segment Outlook**  
   **Q:** What's the outlook for Biopharma, especially early development?  
   **A:** Adam Schechter stated that Biopharma Laboratory Services grew **8%** with Central Labs showing strong growth at **13%**. While early development continues to face higher cancellations than expected, RFP flow and win rates remain good. They expect early development to improve starting in the second half of the year, with Central Labs continuing to outperform.  **[LH_3380701_8]** 

4. **Early Development Book-to-Bill**  
   **Q:** Can you elaborate on early development's book-to-bill ratio?  
   **A:** The early development's book-to-bill was **1.0**, lower than preferred, but they expect it to grow throughout the year. Despite higher cancellations impacting the book-to-bill, RFPs and win rates are good. Early development studies often start and finish within the same year, so the book-to-bill is less indicative. They anticipate early development to strengthen in the second half.  **[LH_3380701_9]** 

5. **Diagnostics Guidance and Growth**  
   **Q:** How much of Diagnostics growth is from acquisitions vs. organic demand?  
   **A:** Glenn Eisenberg explained that about half of the **140 basis points** improvement at the midpoint of Diagnostics guidance is due to three acquisitions announced in the quarter. The other half is from stronger demand witnessed in the first quarter, which they expect to continue throughout the year.  **[LH_3380701_7]** 

6. **Diagnostic Margins and Lab Management Deals**  
   **Q:** How do lab management deals affect Diagnostics margins?  
   **A:** Adam Schechter noted that lab management agreements initially have lower margins, slightly impacting overall margins, but they improve over time as they leverage their size, scale, and cost synergies. They expect Diagnostics margins to increase when comparing '24 to '23.  **[LH_3380701_14]** 

7. **NHP Pricing Impact**  
   **Q:** How does NHP pricing affect early development revenues?  
   **A:** Adam Schechter stated that with NHP (Non-Human Primate) prices coming down, revenues from NHP studies have decreased, leading to a revenue drag. This decrease reflects the lower prices rather than demand. Growth in non-NHP studies is better, and both are beginning to recover as the biotech world shows signs of improvement.  **[LH_3380701_15]** 

8. **Hospital Lab Deals and Market Share**  
   **Q:** Are national labs gaining market share from hospital deals?  
   **A:** Adam Schechter mentioned that recent hospital deals contribute to market share gains. By managing hospital labs and leveraging their strength in the hospital market sector, LabCorp is capturing additional market share. The overall market is strong, with more people undergoing procedures, and they are benefiting from both underlying demand and market share gains.  **[LH_3380701_12]** 

9. **Capital Allocation and Deal Pipeline**  
   **Q:** What's your capital allocation priority and deal pipeline outlook?  
   **A:** Glenn Eisenberg stated that they have allocated over **$700 million** to M&A this year, including acquisitions like BioReference and Invitae. With dividends added, they are approaching **$1 billion** in capital allocation. They have ample financial flexibility, with leverage at around **2.5x** EBITDA, to pursue strategic tuck-in acquisitions and maintain a good pipeline of potential opportunities.  **[LH_3380701_21]** 

10. **Labor Trends and Turnover**  
    **Q:** How are labor trends affecting margins and turnover?  
    **A:** Adam Schechter reported that overall turnover at LabCorp is better now than last year. In Diagnostics, turnover remains higher in certain areas compared to pre-pandemic levels, especially among frontline employees. Wage inflation had a significant impact in the past, but going forward, they expect it to return to a more typical level of around **3%**.  **[LH_3380701_24]** 

11. **Alzheimer's Market Opportunity**  
    **Q:** What's the outlook for your Alzheimer's portfolio?  
    **A:** Adam Schechter indicated that their Alzheimer's portfolio is currently a small but important part of the business. With new therapies expected over time, they aim to offer a broad portfolio for physicians to aid in diagnosis and monitoring. He expects the market for these tests to grow progressively, aligning with the expansion of prescription drug treatments for Alzheimer's disease.  **[LH_3380701_18]** 

12. **LDT Regulation Impact**  
    **Q:** How will FDA's final LDT rules affect your business?  
    **A:** Adam Schechter expressed concern about the potential impact of the FDA's final rule on Laboratory Developed Tests (LDTs). While LabCorp supported the VALID Act, which was tailored for the industry, they are not supportive of the current rule in progress. The main concern is the speed to market for LDTs, as delays could affect patients who need timely access to these tests. The impact will depend on how quickly the FDA can review and approve new LDTs under the final regulation.  **[LH_3380701_13]** 

13. **Lab Management Deal Integration**  
    **Q:** How is the integration of lab management deals progressing?  
    **A:** Adam Schechter said they've become proficient at integrating lab management agreements, emphasizing patient continuity and physician satisfaction. While margins from these deals start low, they improve over time as they leverage their scale and find cost synergies. Recent deals closed at the end of last year and in the first quarter have a slight initial margin impact, but overall margins are expected to improve as integration advances.  **[LH_3380701_14]** 

14. **Ascension Lab Management Deal**  
    **Q:** Can you update on the Ascension lab management deal's performance?  
    **A:** Adam Schechter and Glenn Eisenberg noted that Ascension was an outlier due to its large lab management component, which has the lowest initial margins. While margins started in the mid-single digits, they expect incremental improvement over the years. Revenue from the deal is slightly above original guidance, and they anticipate positive margin direction with more significant improvements in subsequent years.  **[LH_3380701_20]** 

7f3d7fba015d0e3ce20911ce77cdf146ee0c169bd8769f3f2fd84c3303f3aa53

- **The acquisition of Invitae is negatively impacting margins**, causing a 40 basis point margin reduction this year and expected to continue showing **negative year-over-year margin comparisons through the first half of next year** until integration is complete.  **[LH_3403591_8]**   **[LH_3403591_18]**
- **LabCorp's consumer business, Labcorp OnDemand, lacks critical mass** and is not contributing material revenue at this time, suggesting **limited impact on financial performance** in the near term.  **[LH_3403591_22]**
- In the **competitive hereditary testing market**, LabCorp expects revenue growth from the Invitae acquisition to be approximately 10%, which **matches market growth and may indicate challenges in gaining market share** beyond industry averages.  **[LH_3403591_14]**

93f4d2b4e2d5812ae2bdcb1a739c1afc3d57e63e052c82f1abdd587e344fdc3d

- **Strong Volume Growth and Market Share Gains in Diagnostics Segment:** LabCorp is experiencing robust demand and volume growth in its Diagnostics segment, with base business volume increasing nearly **5%**. The company is gaining market share through hospital deals and lab management agreements, which are contributing to increased volumes and strengthening its position in the hospital market sector  **[LH_3380701_12]** ,.  **[LH_3380701_17]**
- **Raised Guidance Driven by Acquisitions and Strong Base Business Demand:** LabCorp increased its full-year guidance for the Diagnostics segment, with approximately half of the **140 basis point** improvement at the midpoint attributable to acquisitions and the other half to stronger demand. This reflects the company's successful acquisition strategy and solid performance in its base business  **[LH_3380701_7]** ,.  **[LH_3380701_16]**
- **Expected Margin Improvement and Operational Efficiency:** Despite initial impacts on margins from lab management agreements, LabCorp expects Diagnostics margins to improve over the year and be higher in **2024** compared to **2023**. The company is also seeing improvements in labor costs and turnover rates, particularly in its Biopharma business where turnover is back to pre-pandemic levels or better, supporting operational efficiency and profitability  **[LH_3380701_12]** ,  **[LH_3380701_16]** ,.  **[LH_3380701_24]**

627f9affe27cd168a9e2a2d4ca72526493dbd1252325fb5a7e0b31a71a237902

1. **Margin Outlook**  
   **Q:** How are margins progressing and expectations for next year?  
   **A:** Management highlighted that despite headwinds from the Invitae acquisition, weather impacts, and unfavorable payroll days totaling **210 basis points**  **[LH_3403591_18]** , underlying margins improved by **80 basis points**.  **[LH_3403591_18]**  They expect these headwinds to become tailwinds next year, boosting margins further.  **[LH_3403591_9]**  LaunchPad initiatives are on track to deliver **$100–$125 million** in savings  **[LH_3403591_9]** **[LH_3403591_20]** , helping offset wage inflation.  **[LH_3403591_20]** 

2. **Invitae Acquisition Impact**  
   **Q:** What is the impact of Invitae on margins and growth?  
   **A:** The Invitae acquisition negatively impacted margins by **40 basis points** this year.  **[LH_3403591_8]**  Management expects Invitae to be **slightly accretive** next year  **[LH_3403591_8]** **[LH_3403591_19]** , with revenue growth of about **10%**.  **[LH_3403591_8]** **[LH_3403591_14]**  Integration is progressing well, and margins will improve each quarter, turning positive in the second half of next year.  **[LH_3403591_8]** **[LH_3403591_19]** 

3. **Early Development Business Outlook**  
   **Q:** How is the early development business expected to perform?  
   **A:** Early Development showed sequential revenue growth in Q3  **[LH_3403591_12]** , and management expects positive year-over-year growth in Q4.  **[LH_3403591_12]** **[LH_3403591_9]**  With a soft comp last year and solid backlog execution, they anticipate continued growth into 2025, contributing to margin improvement.  **[LH_3403591_12]** 

4. **Managed Care Contracts**  
   **Q:** How are payer relationships and pricing environment?  
   **A:** Management feels very good about managed care contracts, securing renewals on good terms.  **[LH_3403591_11]**  Overall, they expect a **neutral to slightly positive** impact moving forward, which is better than historical trends.  **[LH_3403591_11]** **[LH_3403591_16]**  Nonexclusive contracts are preferred, allowing competitive positioning without significant downside.  **[LH_3403591_16]** 

5. **Inorganic Growth and M&A Pipeline**  
   **Q:** What are expectations for inorganic growth and M&A?  
   **A:** The company increased its inorganic growth expectations from **1–2%** to **1.5–2.5%** in their long-term guidance.  **[LH_3403591_10]** **[LH_3403591_13]** **[LH_3403591_29]**  The M&A pipeline is robust, focusing on hospital, local, and regional laboratories that are accretive in the first year.  **[LH_3403591_27]** **[LH_3403591_29]**  Management is optimistic about future deals contributing to growth.  **[LH_3403591_29]** 

6. **PAMA Impact Deferred**  
   **Q:** How does PAMA delay affect long-term guidance?  
   **A:** While PAMA impacts have been postponed, management still includes it in their long-term guidance but notes that further delays could positively affect margins and revenue.  **[LH_3403591_13]**  They remain confident in their ranges despite this potential upside.  **[LH_3403591_13]** 

7. **Debt Refinancing and Interest Expense**  
   **Q:** What are expectations for interest expense after refinancing?  
   **A:** The company completed refinancing, raising **$2 billion** of debt with better-than-expected pricing.  **[LH_3403591_15]**  Interest expense is expected to be slightly favorable compared to previous forecasts of **$210 million** this year and **$240 million** next year.  **[LH_3403591_15]** 

8. **Diagnostics Utilization Trends**  
   **Q:** How are current utilization trends in Diagnostics?  
   **A:** Diagnostics utilization is accelerating, with volume up **2.7%** despite weather constraints.  **[LH_3403591_8]**  The company expects continued momentum, with organic revenue growth of **2.5–4.5%** and increased inorganic growth.  **[LH_3403591_10]**  They are gaining market share through hospital deals and regional labs.  **[LH_3403591_10]** 

9. **Oncology Testing Growth**  
   **Q:** How is the oncology testing business performing?  
   **A:** The oncology portfolio is growing faster than routine testing, driven by both basic and esoteric tests.  **[LH_3403591_17]**  Management expects this franchise to continue outpacing overall diagnostics growth, leveraging their comprehensive test offerings.  **[LH_3403591_17]** 

10. **LaunchPad Savings**  
    **Q:** Are LaunchPad savings offsetting inflationary pressures?  
    **A:** LaunchPad initiatives are effectively offsetting wage inflation.  **[LH_3403591_20]**  The company is on track to achieve **$100–$125 million** in savings  **[LH_3403591_9]** **[LH_3403591_20]** , comparable to a **3% merit increase**  **[LH_3403591_20]** , helping manage personnel costs despite competitive labor markets.  **[LH_3403591_28]** 

11. **Walgreens Partnership Impact**  
    **Q:** How will Walgreens store closures affect Labcorp?  
    **A:** Labcorp maintains a strong relationship with Walgreens, operating about **400** patient service centers in their stores.  **[LH_3403591_24]**  While store closures may occur, they expect minimal impact as they can relocate centers to other stores or standalone sites.  **[LH_3403591_24]**  The initial site selection was strategic, focusing on high-volume locations.  **[LH_3403591_25]** 

8517680dc91211570da378c94d98a08dc2419a25c22eb33af6ebc1530e9559b3

1. **Invitae Acquisition Impact**  
   **Q:** Why is Invitae accretive faster than expected?  
   **A:** The Invitae acquisition is closing faster than anticipated, allowing us to move quickly. This results in more dilution in 2024 but makes it accretive in 2025.  **[LH_3395647_6]** 

2. **Early Development Outlook**  
   **Q:** How will early development improve in H2?  
   **A:** Early Development has reached its trough, with strong bookings and significantly fewer cancellations. This gives us confidence in improved performance as we progress through the year.  **[LH_3395647_6]** 

3. **Debt Refinancing Plans**  
   **Q:** What are your plans for maturing debt?  
   **A:** We have $2 billion maturing in the next 12 months and expect to refinance all of it. Net interest expense will be around **$210 million** this year, increasing to approximately **$240 million** next year due to higher rates.  **[LH_3395647_8]** 

4. **Margins and Cost Pressures**  
   **Q:** Can LaunchPad offset inflationary pressures?  
   **A:** LaunchPad is delivering **$100–$125 million** per year in savings, offsetting personnel cost inflation. We expect good leverage on incremental volumes, helping maintain margins despite inflation.  **[LH_3395647_17]** 

5. **Diagnostics Growth Drivers**  
   **Q:** What's driving strong diagnostics revenue growth?  
   **A:** Diagnostics revenue grew **8%**, with **6%** from volume and **2%** from price/mix. Key drivers are strong execution, hospital and lab deals with spillover effects, increased tests per accession, and a shift toward specialty testing.  **[LH_3395647_15]** 

6. **PAMA/SALSA Legislation Impact**  
   **Q:** Any updates on SALSA legislation?  
   **A:** We strongly support SALSA, which has bipartisan support but hasn't passed yet. If delayed again, we avoid an **$80 million** downside next year, benefiting our bottom line.  **[LH_3395647_18]** 

7. **Invitae Integration Confidence**  
   **Q:** How confident are you in Invitae integration?  
   **A:** We've established a competent integration team, and monthly sales are stable. We're focused on growth opportunities rather than leakage, feeling good about the transition.  **[LH_3395647_13]** 

8. **Early Development Pricing**  
   **Q:** Any shifts in early development pricing?  
   **A:** The biggest pricing change is lower NHP costs compared to last year, which improves margins. Core pricing remains relatively stable amid ongoing pressure.  **[LH_3395647_11]** 

9. **Biopharma Client Mix**  
   **Q:** Has there been a shift in client mix?  
   **A:** In early development, the majority of business comes from small biotech companies. While large pharma orders haven't significantly increased, the small biotech market is improving, boosting our book-to-bill ratio.  **[LH_3395647_20]** 

10. **M&A Pipeline Strategy**  
    **Q:** How is the M&A environment changing?  
    **A:** We're seeing more opportunities as hospitals and regional labs consider selling their lab businesses post-COVID. Invitae is a strategic acquisition expected to be accretive in the second year, with most deals being accretive in year one.  **[LH_3395647_22]** 

11. **Utilization Trends**  
    **Q:** What are your expectations for utilization?  
    **A:** We expect continued strong utilization, with organic base business volume up **3.5%**. Diagnostics revenue is projected to grow around **9%** this year, with utilization being a significant driver.  **[LH_3395647_24]** 

12. **Labor Costs and Turnover**  
    **Q:** How are labor costs and turnover trending?  
    **A:** Labor market has improved, with personnel cost inflation around **3%**. LaunchPad helps offset these costs. Attrition rates are as expected, and turnover is normalizing in most areas.  **[LH_3395647_21]** 

13. **LDT Rule Impact**  
    **Q:** How will the LDT rule affect you?  
    **A:** We support the VALID Act and are prepared to comply with the LDT rule, though it won't significantly impact our revenue or expenses. The bigger concern is patient access to important tests.  **[LH_3395647_18]** 

14. **Employer Testing Impact**  
    **Q:** How is the employer testing market affecting you?  
    **A:** We've seen a decrease but it's less than **5%** of our business and not material. Employers haven't fully returned to pre-pandemic activities like wellness events.  **[LH_3395647_10]** 

15. **Margins Outlook into 2025**  
    **Q:** What are the margin expectations into 2025?  
    **A:** Overall margins this year are flat due to Invitae's 40 basis point headwind. Excluding Invitae, we'd see a 40+ basis point improvement. In 2025, Invitae will start contributing positively to margins once annualized.  **[LH_3395647_25]** 

65c7e351b0f2aec257815467760e0f61cdb5fe09f9bea31db856fbf65b35ceca

- LabCorp's Diagnostics margins are being constrained by the mix impact from recently closed hospital partnerships, which are initially dilutive and will take time to improve.  **[LH_3373503_18]**
- The Early Development Research Laboratories business is experiencing higher-than-normal cancellations due to funding issues in smaller biotech companies and other factors, which could impact revenue growth.  **[LH_3373503_19]**
- COVID testing revenue is expected to decline by **$130 million** in 2024, creating a headwind for the Diagnostics business.  **[LH_3373503_15]**

c35231d98c55cf08b229e561befd943fa9f3157effee5931ba455faf75776712

Labcorp Holdings Inc (LH)

Financials