DGX

Quest Diagnostics delivered its best year in the visible history, with FY2025 revenue of $11.0B up 11.8% and net income of $992M up 13.9%, reversing the post-pandemic slide that took revenue from $10.8B in FY2021 down to $9.25B in FY2023. The recovery is broad-based and acquisition-fueled: the DIS (diagnostic information services) segment, which is 97.7% of revenue, grew 12.2% to $10,785M per the MD&A, while operating income expanded 15.6% to $1.56B as operating margin ticked up to 14.1% from 13.6%. Operating cash flow surged 41.4% to $1.89B, comfortably funding $527M of capex, a $450M ramp in buybacks and $353M of dividends.

The balance sheet is steady rather than pristine. Long-term debt fell 8.0% to $5.17B and current debt dropped to $504M, but cash is thin at $420M (down 23.5%) and interest expense climbed 31.5% to $264M as the company leaned on acquisitions for growth. Returns are decent at 13.8% ROE, and management's own MD&A flags that reported EPS was depressed by $1.10 of one-time items (amortization, restructuring/integration charges, asset impairments), implying underlying earnings power is somewhat better than the headline $8.75.