LABCORP HOLDINGS INC.

Labcorp Holdings Inc. is a global leader of innovative and comprehensive laboratory services that provides vital information to help doctors, hospitals, pharmaceutical companies, researchers, and patients make clear and confident decisions. The Company provides insights and accelerates innovations to improve health and improve lives through its unparalleled diagnostics and drug development laboratory capabilities. During 2025, the Company's nearly 71,000 employees served clients in approximately 100 countries and performed more than 750 million tests for patients around the world. In addition, the Company provided support for more than 85% of the new drugs and therapeutic products approved in 2025 by the FDA. The Company's strength in science, technology, and innovation, as well as its global scale, powers its continued success, differentiates the Company, and enables it to play a leading role in advancing healthcare across the globe. Based on Company estimates, in 2025, the U.S. clinical laboratory testing industry generated revenues of more than $80 billion. Based on Company estimates, in 2025, the global pharmaceutical industry spent more than $200 billion on R&D.

The commercial laboratory business is intensely competitive, and the Company believes that both competition and consolidation in the clinical laboratory business will continue. CMS has estimated that, as of March 2024 (the most recent data available to the Company as of the filing of this report), there were nearly 320,000 clinical laboratories of all types, including approximately 9,200 hospital-based laboratories, just under 123,000 physician-office laboratories, and approximately 8,500 independent clinical and anatomic pathology laboratories in the U.S. Dx competes with each of these laboratory types. The drug development industry has many participants ranging from hundreds of small providers to a limited number of large companies with global capabilities. BLS competes against these small and large businesses, as well as in-house departments of pharmaceutical, biotechnology, and diagnostic companies, and to a lesser extent, selected academic research centers, universities, and teaching hospitals. The Company believes that the selection of a laboratory is primarily based on factors including brand strength and reputation, contractual relationships with MCOs, leadership in science, technology, and innovation, number and type of tests performed, patient satisfaction levels, connectivity solutions offered, quality, timeliness, and consistency in reporting test results, national scale and local presence with access to testing within 10 miles of most households, and pricing of the laboratory's services.

The Company is organized under two segments: Dx, which includes routine testing and specialty/esoteric testing; and BLS, consisting of Central Laboratory and ED businesses. Nearly all of Dx's revenues were generated in the U.S. Approximately 41% and 59% of BLS's revenues were derived from the U.S. and other countries, respectively. During 2025, the Company's revenues of $13,951.7 million were generated as follows: Dx revenues of 78% and BLS revenues of 22%. Dx offers a comprehensive menu of frequently requested core testing and specialty testing through an integrated network of primary and specialty laboratories across the U.S. and Canada. During 2025, the Dx segment generated $10,876.5 million in revenues. Dx provides broad patient access through strategically located service sites across the U.S., including more than 2,200 PSCs and more than 7,000 in-office phlebotomists located in customer offices and facilities. BLS serves pharmaceutical, biotechnology, and diagnostic companies worldwide and operates a global network with deep expertise across early development and clinical trial execution in multiple therapeutic areas. During 2025, the BLS segment generated $3,098.2 million in revenues. BLS supported approximately 85% of new drugs and therapeutic products approved by the FDA in 2025, including 81% of oncology-related approvals, 86% of approvals submitted by biotechnology companies, and 84% of approvals submitted by leading and large pharmaceutical companies.

The Dx business operates through core capabilities including testing operations and productivity, testing and related services, and development of new tests. Dx operates a network of PSCs and in-office phlebotomy locations that provide specimen collection services, maintains a comprehensive supply chain, and supports operations with a sophisticated information technology system, including more than 90,000 electronic interfaces, enabling the vast majority of test results to be delivered within one to two days to healthcare providers and patients with a Labcorp Patient account. Dx adheres to rigorous quality standards, with 26 regional and specialty laboratories holding ISO 15189 certification and one laboratory holding ISO 13485 certification. Standard testing services include frequently ordered tests used in routine patient care, including blood chemistry analyses, urinalyses, blood cell counts, thyroid tests, PAP tests, hemoglobin A1C, PSA, tests for sexually transmitted diseases, vitamin D testing, microbiology cultures and procedures, and alcohol and other substance abuse tests. Specialty testing services include gene-based and esoteric testing using advanced technologies to target specific diseases, including services in anatomic pathology/oncology, cardiovascular disease, coagulation, diagnostic genetics, endocrinology, infectious disease, women's health, pharmacogenetics, parentage and donor testing, occupational testing services, medical drug monitoring, chronic disease programs, and kidney stone prevention. Health and wellness services include testing and related services provided to consumers, employers, and managed care organizations, including health fairs, on-site and at-home testing, vaccinations, and health screenings. Dx launched more than 130 new tests in 2025 and maintains an active diagnostics and therapeutics research division, producing approximately 1,000 studies, articles, and presentations in 2025. The Company provides a range of technology-enabled services and support including digital pathology solutions, provider and payer digital platforms, CDS reporting with nearly 10 million enhanced CDS reports delivered to physicians and health systems, patient-facing digital applications, and a generative AI-enabled test selection tool called Test Finder.

The BLS business operates through core capabilities including Early Development Research Laboratories and Central Laboratory. Early Development Research Laboratories provide lead optimization, analytical services, safety assessment, chemistry manufacturing services, early phase development solutions, and crop protection and chemical testing. Central Laboratory provides clinical laboratory services for clinical trials, delivering these services to biopharmaceutical customers through a global network of specialty and central laboratories in the U.S., Europe, and Asia maintaining nine ISO 15189-certified laboratories and three ISO 13485-certified laboratories. Central Laboratory operates the world's largest automated clinical trial sample collection kit production with 5.5 sigma precision to enable consistent, protocol-specific specimen collections. Central Laboratory maintains robust logistics and sample management capabilities, including transportation and tracking on a global scale, as well as pre-analytical services, specimen storage and shipment, and biorepository services. Central Laboratory provides proprietary digital tools and data services including Labcorp Global Trial Connect, a suite of central laboratory digital and data solutions that support sponsors and investigators with accelerated study start-up, supply management, site workflows and sample tracking visibility, and query and error reduction. Central Laboratory offers services to increase patient access to clinical trials globally, support for decentralized clinical trials and clinical site selection, and data services to support protocol design and optimization along with patient identification outreach for clinical trial recruitment.

During 2025, the Company signed or completed 13 collaboration transactions with health systems and local and regional laboratories. The Company expanded its specialty testing offerings with the launch of tests that aid in the diagnosis of Alzheimer's disease, indicate the presence of molecular residual disease, and expand precision and offerings within its oncology portfolio. During 2025, the Company expanded its cell and gene therapy laboratory in Madison, Wisconsin, increasing capacity to support the acceleration in this area from discovery to investigational new drug application and clinical trial application. The Company advanced its consumer-centric capabilities by launching nationwide self-collection options for human papillomavirus and sexually transmitted infection testing. During 2025, the Company advanced its international strategy through the acquisition of a minority stake in SYNLAB, a leader in medical diagnostic services and specialty testing in Europe. During 2025, the Company invested $582.0 million in strategic business acquisitions. The Company returned capital to shareholders during 2025 through the repurchase of 1.8 million shares of its common stock at an average price of $254.17 per share for a total cost of $450.0 million and paid dividends of $240.7 million. At the end of 2025, the Company had outstanding authorization from its Board to purchase up to $830.4 million maximum value of Common Stock. Capital expenditures during 2025 totaled $434.5 million, representing 3.1% of the Company's revenues. The Company expects capital expenditures to increase to approximately 4.0% of revenues, primarily to support growth in its core businesses, facility expansions and upgrades, initiatives related to its LaunchPad program, and ongoing acquisition integration activities. In 2025, the Company awarded $103 million in annual merit increases and increased its minimum hourly wage for all U.S.-based, non-union employees to $17.75 per hour, representing a $20 million investment in its frontline workforce.

For the year ended December 31, 2025, the Company's revenues were $13,951.7 million, an increase of 7.2% from $13,008.9 million for the corresponding period in 2024. The 7.2% increase in revenues was primarily due to organic revenue of 4.4%, acquisitions, net of divestitures of 2.5%, and favorable foreign currency translation of 0.4%. Dx revenues for the year ended December 31, 2025, were $10,876.5 million, an increase of 7.2% compared to revenues of $10,144.3 million in the corresponding period in 2024. BLS revenues for the year ended December 31, 2025, were $3,098.2 million, an increase of 6.0% over revenues of $2,922.6 million in the corresponding period in 2024. Cost of revenues increased 5.9% for the year ended December 31, 2025, as compared with the corresponding period in 2024, and decreased as a percentage of revenues to 71.2% for the year ended December 31, 2025, as compared to 72.1% for the corresponding period in 2024. Selling, general, and administrative expenses as a percentage of revenues decreased to 15.9% for the year ended December 31, 2025, as compared to 17.1% for the year ended December 31, 2024. Operating income was $1,384.7 million for the year ended December 31, 2025, compared to $1,086.7 million for the year ended December 31, 2024. Net earnings attributable to Labcorp Holdings Inc. were $876.5 million for the year ended December 31, 2025, compared to $746.0 million for the year ended December 31, 2024. Diluted earnings per share from continuing operations were $10.46 for the year ended December 31, 2025, compared to $8.84 for the year ended December 31, 2024.

The Company expects capital expenditures to increase to approximately 4.0% of revenues, primarily to support growth in its core businesses, facility expansions and upgrades, initiatives related to its LaunchPad program, and ongoing acquisition integration activities. The Company expects this level of spending to increase in 2026 to 4.0%, primarily in connection with projects to support growth in the Company's core businesses, facility expansion and updates, projects related to its LaunchPad initiative, and further acquisition integration initiatives.

The Company is focused on two near-term strategic opportunities for growth across both Dx and BLS: Be a Partner of Choice for Health Systems and Local and Regional Laboratories, and Lead in the Development, Licensing, and Scaling of Specialty Testing. The Company expects hospitals, health systems, and other laboratories to focus on investing in core patient care services, while seeking partners that offer comprehensive testing capabilities. The Company continues to see a strong pipeline of partnership opportunities and, during 2025, signed or completed 13 collaboration transactions with health systems and local and regional laboratories. The Company seeks partnerships that meet financial criteria, including being accretive in the first year, returning the cost of capital within three years, and providing a clear path to margin improvement. The specialty testing market continues to experience above-market growth, driven by scientific advancement, earlier disease detection, increased adoption of biomarker-based testing, and growing demand for more personalized care. The Company focuses on four primary specialty testing areas that it believes represent significant growth areas: oncology, women's health, autoimmune disease, and neurology. These areas align closely with the needs of health systems and biopharma customers, as the development of specialty tests and CDx expands access to advanced diagnostics, supports clinical decision-making and precision medicine, and enables scalable, data-driven solutions across patient care and drug development. During 2025, the Company expanded its specialty testing offerings with the launch of tests that aid in the diagnosis of Alzheimer's disease, indicate the presence of molecular residual disease, and expand precision and offerings within its oncology portfolio.

Longer-term, the Company is focused on three enterprise-wide strategic priorities to drive growth: Establish Leadership and Partnership Capabilities in Cell and Gene Therapy, Expand Consumer-centric Capabilities, and Expand Global Reach, Including Through CDx. Cell and gene therapy is an increasing focus of biopharma research and development, with approximately 2,000 clinical trials underway globally, representing roughly 20% of biopharma drug development pipelines. During 2025, the Company expanded its cell and gene therapy laboratory in Madison, Wisconsin, increasing capacity to support the acceleration in this area from discovery to investigational new drug application and clinical trial application. Through its core customer groups, the Company supports approximately 175 million patient encounters annually and has invested in modern capabilities to digitize and enhance the patient journey across its patient service centers. The Company has also expanded its ability to connect directly with consumers and currently offers more than 100 health and wellness tests through its Labcorp OnDemand channel. During 2025, the Company further advanced these capabilities by launching nationwide self-collection options for human papillomavirus and sexually transmitted infection testing. International expansion of specialized diagnostics represents a key opportunity for future growth as the Company continues to advance its pipeline of specialty diagnostics and CDx. The Company is already a key partner to biopharma in CDx development and believes that, as CDx becomes increasingly important across the drug development and commercialization lifecycle, its integrated capabilities position it to support customers in new international markets. During 2025, the Company advanced its international strategy through the acquisition of a minority stake in SYNLAB, a leader in medical diagnostic services and specialty testing in Europe.

Cost of revenues decreased as a percentage of revenues to 71.2% for the year ended December 31, 2025, as compared to 72.1% for the corresponding period in 2024, primarily due to operational efficiencies and the impact from revenue growth, including the performance of Invitae. Selling, general, and administrative expenses as a percentage of revenues decreased to 15.9% for the year ended December 31, 2025, as compared to 17.1% for the year ended December 31, 2024, primarily due to growth in demand as the Company leveraged the growth of its revenues and a decrease in costs related to the Spin-off, partially offset by higher personnel costs and the impact from Invitae. Dx segment operating margin increased approximately 50 basis points year-over-year, primarily due to increased organic revenue growth, including the performance of Invitae. BLS segment operating margin increased approximately 40 basis points year over year, primarily due to increased organic revenue growth and operating efficiencies, partially offset by higher personnel costs. For the year ended December 31, 2025, the Company recorded net restructuring charges of $127.2 million, including $105.5 million of charges associated with the restructuring of ED.

Capital expenditures during 2025 totaled $434.5 million, representing 3.1% of the Company's revenues. The Company expects capital expenditures to increase to approximately 4.0% of revenues, primarily to support growth in its core businesses, facility expansions and upgrades, initiatives related to its LaunchPad program, and ongoing acquisition integration activities. The Company expects this level of spending to increase in 2026 to 4.0%, primarily in connection with projects to support growth in the Company's core businesses, facility expansion and updates, projects related to its LaunchPad initiative, and further acquisition integration initiatives.

During 2025, the Company invested $582.0 million in strategic business acquisitions. The Company returned capital to shareholders during 2025 through the repurchase of 1.8 million shares of its common stock at an average price of $254.17 per share for a total cost of $450.0 million and paid dividends of $240.7 million. At the end of 2025, the Company had outstanding authorization from its Board to purchase up to $830.4 million maximum value of Common Stock. On January 14, 2026, the Company announced a cash dividend of $0.72 per share of Common Stock, or approximately $61.0 million in the aggregate. The dividend will be paid on March 12, 2026, to stockholders of record of all issued and outstanding shares of Common Stock as of the close of business on February 27, 2026. In 2025, the Company borrowed an additional $225.0 million under its AR Facility, bringing the amount outstanding to $525.0 million at December 31, 2025. On January 28, 2026, the Company amended its AR Facility, extending the scheduled termination date to January 26, 2029 and permitting the Company at its option to increase the facility limit from $700.0 million to $825.0 million at any time on or before May 29, 2026.

Government and commercial payers in the U.S. continue to implement measures to control healthcare costs and utilization, resulting in ongoing reimbursement pressure and increased administrative complexity for the clinical laboratory industry. The Company believes that pressure to reduce government and commercial reimbursement for clinical laboratory services is likely to continue. PAMA resulted in a net reduction in reimbursement revenue of approximately $245.0 million between 2018-2020 from all payers affected by the CLFS. Since 2021, the implementation of additional PAMA reporting and reimbursement changes has been delayed each year by legislators, including in early 2026. Under the Consolidated Appropriations Act that became law on February 3, 2026, the PAMA data collection period for private payer rates will be January 1, 2025 to June 30, 2025, the period for reporting rates to CMS will be May 1, 2026 to July 31, 2026 to set CLFS prices for 2027 to 2029, and phased-in rate decreases based on PAMA reporting are frozen for 2026, but will resume in 2027 and be capped at 15% per year for 2027 to 2029. Further healthcare reform could occur in 2026, including changes to the Patient Protection and Affordable Care Act, Medicare and Medicaid programs, and other administrative requirements that could affect coverage, reimbursement levels, and utilization of laboratory services in ways that remain difficult to predict. On July 4, 2025, the U.S. government enacted the OBBBA, which includes provisions addressing regulations and federal funding affecting healthcare, including changes to Medicaid and the ACA, and could lead to revised regulatory requirements and reduced federal funding.

The Company's international operations are subject to foreign laws and regulations that differ from those in the U.S., and noncompliance may result in penalties, restrictions, and reputational harm. Risks include changes in reimbursement by foreign governments, export controls, trade regulations, tax policies, labor laws, and currency repatriation restrictions. Approximately 13.5% and 13.7% of the Company's revenues for the year ended December 31, 2025, and 2024, respectively, were denominated in currencies other than the USD. Excluding the impacts from any outstanding or future hedging transactions, a hypothetical change of 10% in average exchange rates used to translate all foreign currencies to USD would have impacted income before income taxes for 2025 by approximately $31.7 million. The Company is a party to USD to Swiss Franc cross-currency swap agreements with an aggregate notional amount of $1,200.0 million, $300.0 million maturing in 2029, $300.0 million maturing in 2031 and $600.0 million maturing in 2034, as a hedge against the impact of foreign exchange movements on its net investment in a Swiss Franc functional currency subsidiary.

The Company faces significant reimbursement pressure from government and commercial payers, with PAMA having resulted in a net reduction in reimbursement revenue of approximately $245.0 million between 2018-2020 from all payers affected by the CLFS, and phased-in rate decreases frozen for 2026 but resuming in 2027 capped at 15% per year for 2027-2029. The Company is subject to extensive healthcare fraud and abuse laws, and noncompliance could result in civil or criminal penalties, exclusion from Medicare and Medicaid, and restrictions on the use of the Company's laboratories. The Company faces intellectual property litigation risk, as evidenced by the Ravgen patent infringement lawsuit where a jury awarded damages of $272.0 million, the court awarded additional enhanced damages of $100.0 million, and post-verdict supplemental damages of $2.6 million plus an ongoing royalty of $100 per test through the life of the patent. The Company's level of indebtedness totaled $5.2 billion in aggregate principal on outstanding senior notes at December 31, 2025, of which $500.0 million is payable within the next 12 months, and the Company is required to maintain a leverage ratio within certain limits under its $1.0 billion revolving credit facility. The Company faces cybersecurity threats, including ransomware attempts, data breaches, and phishing and social engineering attempts, and a compromise of the Company's or a vendor's systems could result in litigation, fines, or regulatory actions, as illustrated by the AMCA Incident which resulted in costs, pending and threatened litigation, and regulatory inquiries.

Management's message emphasizes the Company's role as a global leader of innovative and comprehensive laboratory services, providing vital information to help doctors, hospitals, pharmaceutical companies, researchers, and patients make clear and confident decisions. The Company is focused on two near-term strategic opportunities for growth across both Dx and BLS: Be a Partner of Choice for Health Systems and Local and Regional Laboratories, and Lead in the Development, Licensing, and Scaling of Specialty Testing. Longer-term, the Company is focused on three enterprise-wide strategic priorities to drive growth: Establish Leadership and Partnership Capabilities in Cell and Gene Therapy, Expand Consumer-centric Capabilities, and Expand Global Reach, Including Through CDx. The Company believes it has a strong track record of deploying capital to investments that enhance the Company's business and return capital to shareholders. The Company expects capital expenditures to increase to approximately 4.0% of revenues, primarily to support growth in its core businesses, facility expansions and upgrades, initiatives related to its LaunchPad program, and ongoing acquisition integration activities. The Company expects this level of spending to increase in 2026 to 4.0%, primarily in connection with projects to support growth in the Company's core businesses, facility expansion and updates, projects related to its LaunchPad initiative, and further acquisition integration initiatives.