DGX earnings analysis
What we found in DGX's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Quest Diagnostics reported Q1 2026 net revenues of $2,895 million (up $243 million or ~9.2% vs Q1 2025) and diluted EPS of $2.24 (up $0.30 vs $1.94 in Q1 2025). Operating income increased to $399 million from $346 million a year ago, while operating cash flow was $278 million and capital expenditures were $114 million. The 10-Q discloses a January 2026 acquisition (Corewell-related) and the company’s Invigorate cost program targeting 3% annual savings.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Top-line growth year-over-year
- Net revenues were $2,895 million in Q1 2026 versus $2,652 million in Q1 2025, an increase of $243 million (≈9.2%).
- EPS and operating income improvement
- Diluted EPS rose to $2.24 in Q1 2026 from $1.94 in Q1 2025 (+$0.30) and operating income increased to $399 million from $346 million (+$53 million).
- Margins modestly expanded
- Gross profit was $942 million (computed as $2,895M revenue less $1,953M cost of services), implying a gross margin ≈32.5%; operating income of $399M implies an operating margin ≈13.8%.
- Positive cash generation but lower than prior year
- Net cash provided by operating activities was $278 million and capital expenditures were $114 million, implying free cash flow of about $164 million for the quarter.
- Working capital and receivables/inventory movement
- Accounts receivable increased to $1,587 million from $1,408 million (Dec 31, 2025) and inventories rose to $225 million from $189 million (Dec 31, 2025), while current assets were $2,566 million vs current liabilities $2,177 million.
- Recent acquisition added intangible assets and goodwill
- The Corewell-related transaction closed January 2026 with $38 million cash consideration, a 49% noncontrolling interest valued at $253 million, and preliminary goodwill of $179 million and customer-related intangibles of $124 million.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Cash balance declined sequentially
- Cash and cash equivalents were $393 million at March 31, 2026 versus $420 million at December 31, 2025, a decline of $27 million.
- Receivables and inventory built vs Dec 31, 2025
- Accounts receivable rose to $1,587 million (from $1,408 million) and inventories rose to $225 million (from $189 million), increasing working capital needs.
- Equity in earnings of investees fell
- Equity in earnings of equity method investees was $4 million in Q1 2026 versus $18 million in Q1 2025 (a $14 million decrease).
- Contingent consideration and potential future payouts
- Contingent consideration obligations totaled $99 million as of March 31, 2026 (up from $96 million at December 31, 2025) and Haystack-related contingent payments could total up to $150 million (up to $100M tied to revenue benchmarks plus up to $50M tied to CMS coverage).
- Foreign currency translation swung to a loss
- Other comprehensive loss included a foreign currency translation adjustment of $(16) million in Q1 2026 versus $5 million of other comprehensive income in Q1 2025 (a $(21) million swing).
- No material changes to Risk Factors
- The filing states: 'There have been no material changes in the risk factors described in [the 2025 Form 10-K].' (Item 1A).
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $2.24
- Gross margin
- 32.54%
- Operating margin
- 13.78%
What they said about what is next.
The 10-Q does not provide numeric revenue or EPS guidance. Management discloses the Invigorate program 'aims to deliver 3% annual cost savings,' expects the new Michigan laboratory to be operational 'during 2027,' and the Board increased the share repurchase program by $1 billion in February 2026 (approx. $1,433,481 thousand remaining authorized as of March 31, 2026).
The filing reads about the same as the one before it.
What came before.
- 10-K · February 26, 2026
- Quest Diagnostics reports continued scale and product diversification, with net revenues of $11.0 billion in 2025 and Advanced Diagnostics test offerings generating over $1.0 billion on double‑digit growth. The company…
- 10-K · February 20, 2025
- Quest Diagnostics (10-K for year ended December 31, 2024) presents a strategy focused on growth through an industry-leading test menu, Advanced Diagnostics, data/IT capabilities and disciplined acquisitions while…
- 10-Q · April 24, 2024
- Quest Diagnostics reported Q1 net revenues of $2,366 million, up $35 million (+1.5%) versus $2,331 million a year earlier, while operating income fell to $300 million from $305 million and diluted EPS declined to $1.72…
- 10-Q · October 25, 2023
- Quest Diagnostics reported Q3 net revenues of $2,295 million and diluted EPS of $1.96, missing the year-ago quarter (Q3 2022 revenues $2,486 million; diluted EPS $2.17) but modestly beating Street consensus. Operating…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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