Labcorp Holdings Inc. Morgan Stanley 24th Annual Global Healthcare Conference

Absolutely, and good afternoon, everybody. Erin, thanks for having us. It is a pleasure to be here. Last week we had our Investor Day, and the first thing we did was we showed data on the last three years when we provided longer term guidance and showed that we were able to achieve exactly what we committed to achieving. The second thing we did was we reaffirmed our guidance for the rest of 2026, which we feel very strongly about, remains compelling, and we reaffirmed that guidance. The third thing we did was talk about our long-term strategy and provide longer term guidance for the next three years. If you look at that guidance, I believe it is a very compelling proposition. We have revenue growth of 5%-8% at the midpoint, double-digit EPS growth.

We have margin accretion of 75 to 150 basis points, and we have very strong free cash flow. Then what we did was provide the strategy that shows us the path forward to achieving that growth compelling profile. The strategy focuses on several areas. One is to lead in specialty testing. We are primarily focused in oncology, women's health, autoimmune disease, and neurology. Each of those areas are growing significantly faster than the market. We gave some data on those areas that we can talk about if you would like to in a bit. To continue to win in the hospital, the local regional laboratory business, we have a very strong pipeline of potential acquisitions in those areas that will continue to give us growth. We said in the guidance that we expect 1.5%-2.5% of the revenue growth to come from those types of acquisitions.

If you look at the last three years, it has been about 2.4% of the growth has come from those types of acquisitions. We talked about the importance of using technology and artificial intelligence in the majority of our business, and we are looking at it in three buckets. One, how do we improve the customer experience, thereby driving revenue? Two, how do we reduce cost, thereby improving margins? Then how do we think about transforming aspects of our business in a fundamentally different way in the future? Those three things are helping us reach the LaunchPad initiative, which we increased in this guidance versus prior guidance, where now we expect $125 million-$150 million of savings each year in the longer-term guidance that we provided. So I feel like it was a very successful meeting.

We appreciated those that attended, and we've gotten very positive feedback on the longer-term outlook that we provided.

Yeah. I'll give some feedback. I'll ask Julia to jump in with some specifics. I'd say overall, we feel that the momentum that we've entered the second half in is very strong. As I look at the guidance we provided, obviously there's just over 3 months left. I feel very strongly that reaffirming the guidance tells you we see a clear path forward to achieving the objectives that we've set forth for the rest of this year. The last thing I'll say is that we believe that the guidance and hitting the rest of the year guidance sets us up very well for next year and into the longer-term guidance year.

Yeah. Hi, Erin. It's a pleasure to be here today. As you were saying that last week, we had an opportunity to reaffirm our guidance for 2026 on the full year basis. Essentially, at the midpoint, you are looking at a revenue growth of almost 6%, adjusted EPS growth of over 11%, along with continued margin expansion, as well as strong growth in free cash flow that is expected to be in line with our earnings growth. I think as Adam just mentioned, we are not only very much encouraged about where we are heading in wrapping up 2026. Equally importantly, this strong set of expectations is setting us up with a lot of momentum and as well as strength heading into the next 3 years, as we just laid out last week.

Yeah. The utilization environment remains strong, and we're talking specifically about diagnostics right now. But if you look at our central laboratory business, I look at the book-to-bill, which remains very strong in that business as well. When I think about utilization, obviously, I look at volume. When I look at volume, I not only look at the way we describe volume, but I also look at tests per accession. We continue to see an increase in tests per accession, and I think we're seeing that for two reasons. One is the specialty business. We reported last week for the first time that when we look at our specialty testing, patients in those areas tend to get 50% more tests per accession than the average patient. We've seen a shift in our mix of business, where esoteric business back in 2024 was about 38% of our revenue total.

It's now about 41%. So you're seeing the mix shift, and that mix shift is helping with the test per accession. The second reason I believe you're seeing an increase in test per accession is that there are a lot more new tests that physicians can use to help better diagnose patients. A good example of that is cholesterol testing. If you would've gone back five or seven years ago, a doctor would test your total cholesterol, your LDL, your triglycerides, your HDL. Today, they want to understand your ApoA-I, your ApoB, maybe even HDL subtypes. It gives them more information to better diagnose the patient, but also to better determine what treatment might be most appropriate for those patients. So, the test per accession increase, I think is durable and will continue over time, and that's another metric that we look at for looking at utilization.