Quest Diagnostics (DGX) Q3 2025 Earnings: Growth Fueled by Acquisitions

Quest Diagnostics (DGX), a titan in the medical testing industry, recently released its financial results for the third quarter of 2025. For investors and anyone interested in the healthcare sector, these quarterly filings provide a crucial check-up on the company's financial health. We've examined the latest 10-Q report to distill the key trends and figures shaping the company's performance.

Strong Growth Fueled by Acquisitions

Quest Diagnostics reported a healthy increase in revenue for the third quarter, reaching $2.82 billion, a significant 13.1% jump from the $2.49 billion recorded in the same period last year. The driving force behind this growth was the company's core Diagnostic Information Services (DIS) division, which handles the clinical testing services Quest is known for.

The DIS segment saw its revenue climb 13.5%, propelled by a 12.5% increase in requisition volume—the total number of tests ordered. A closer look reveals a two-pronged growth story:

• Acquisitions contributed approximately 8.6% to the volume increase, showing the company's strategy of buying smaller labs is paying off.
• Organic volume, which measures growth from existing operations, rose by a solid 3.9%, indicating healthy underlying demand for Quest's services.

This blend of organic growth and strategic acquisitions paints a picture of a company successfully expanding its footprint and market share.

Visualizing Quest's Financial Flow

To better understand how revenue translates into profit, the following flow diagram illustrates the company's income statement for the third quarter of 2025. It tracks the journey from $2.82 billion in revenue down to the $245 million in net income attributable to Quest Diagnostics.

Profitability and Shareholder Returns

Beyond the top-line revenue growth, Quest also improved its profitability. Operating income for the quarter rose 16.8% to $386 million, and the company's operating margin expanded slightly from 13.3% to 13.7%. This suggests efficient cost management even as the company integrates new businesses.

The bottom line was equally positive, with net income attributable to Quest climbing to $245 million, or $2.16 per diluted share, up from $226 million, or $1.99 per share, in Q3 2024.

The company's strong performance is also reflected in its cash flow and a notable shift in how it's using that cash. For the first nine months of 2025:

• Net cash from operating activities surged to $1.42 billion from $870 million in the prior year, a testament to strong operational efficiency.
• Quest significantly ramped up its share buyback program, repurchasing $150 million of its own stock, compared to none in the same period of 2024. The company still has $700 million remaining under its current authorization.
• This contrasts sharply with the prior year when cash was heavily deployed for acquisitions. In the first nine months of 2024, Quest spent $1.78 billion on acquisitions, versus just $51 million this year.

The Road Ahead

Quest Diagnostics' third-quarter results demonstrate a company firing on all cylinders. The growth engine, powered by both strategic acquisitions and steady organic demand, is delivering higher revenues and profits. The company's robust cash flow is enabling it to pay down debt while also rewarding shareholders through dividends and a renewed share repurchase program.

Looking forward, the key for Quest will be to continue successfully integrating its recent acquisitions to unlock further efficiencies and to maintain its momentum in a competitive and ever-evolving healthcare landscape.