Quest Diagnostics Incorporated · NYSE:DGX
Quest Diagnostics — William Blair 45th Annual Growth Stock Conference 2025
29 slides from Quest Diagnostics's conference presentation, Jun 3, 2025
Slide 1: Driving Sustainable Growth, Delivering Long-term Value
Driving Sustainable Growth, Delivering Long-term Value William Blair 45th Annual Growth Stock Conference Jim Davis Chairman, CEO, and President June 3, 2025
Slide 2: Safe harbor disclosure
Safe harbor disclosure The statements in this presentation which are not historical facts may be forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date that they are made and which reflect management's current esti
Slide 3: Key highlights
The clinical lab market is expected to remain strong, driven by health trends and diagnostic innovation We have a proven strategy to generate above market growth in key channels Key highlights We expect our investments in advanced diagnostics to deliver double-digit revenue growth across 5 key clini
Slide 4: We help people make the best decisions to improve health
We help people make the best decisions to improve health by providing high-quality and affordable diagnostic testing insights and services using our scale and extensive reach 4
Slide 5: Quest is a leading provider of diagnostic information services
Quest is a leading provider of diagnostic information services ~8K 50% 1/3 ~217M patient access sites >90% US hospitals and US adults served requisitions of insured lives physicians served annually annually in 2024 ~5K in the US vehicles >80B >55K ~850 ~1,600 Global patient employees MDs/PhDs patent
Slide 6: Quest is well positioned in the nearly $90 billion US lab market
Quest is well positioned in the nearly $90 billion US lab market Physician Channel 2024 Total US Lab Market Hospital Channel $58B $89B $31B Quest POL Quest 6% 11% 12% Other Ind Hospital Labs 35% 14% Hospital Other Physician Outreach Independent 65% 35% Labs 42% Other Hospital 80% 2% - 4% CAGR 1% - 3
Slide 7: We are well positioned for growth in Canada's lab market
We are well positioned for growth in Canada’s lab market 2024 Total Canadian Lab Market ~$5B British Columbia LifeLabs Saskatchewan 13% Ontario Community Labs 8% • Leading provider of clinical laboratory testing in Canada 41M people • Headquartered in Toronto • 5 primary labs and 350 collection cent
Slide 8: Nearly 90% of our revenues come from physicians and hospitals
Nearly 90% of our revenues come from physicians and hospitals Other Patients 12% 12% Canadian Government 2% Hospitals Medicaid/Managed Medicaid 20% 8% ~$9.9B Medicare/Medicare Advantage 13% administered by Health Plans 2024 revenues 16% +6.7% Commercial Health Plans 27% growth year-over-year Physici
Slide 9: Macro trends continue to shape healthcare and favor Quest
Macro trends continue to shape healthcare and favor Quest Demographic Innovations Greater adoption Consumer focus shifts– in lab of AI and on prevention older, sicker diagnostics automation and wellness population 9
Slide 10: The US population is growing older and sicker
The US population is growing older and sicker Life expectancy vs health expenditure 74% 40% From 1970 to 2018 of adults live with of children live with excess weight or obesity excess weight or obesity 52% 30% of adults have of teens have prediabetes or T2D prediabetes Life expectancy USA 79% 1 in 2
Slide 11: Our strategy supports above market growth in key channels
Our strategy supports above market growth in key channels Physicians Hospitals Expand in high-growth areas 4% - 5% 5% - 6% >20% CAGR CAGR CAGR • Capitalize on expanded health • Serve hospitals through scaled • Drive growth in consumer-initiated plan network access reference testing testing • Extend
Slide 12: Our unique strengths will enable us to capitalize on physician market trends
Physicians Our unique strengths will enable us to capitalize on physician market trends 1 2 3 4 5 Scale Broad access Clinical Health plan Value (PSCs, IOPs) innovation access PSCs: patient service centers; IOPs: in-office phlebotomists. 12
Slide 13: Leveraging health plan access to increase presence in new geographies
Physicians We are leveraging our health plan access to increase our presence in new geographies Over 1 million net new lives added Segmentation of top 50 MSAs High 14 20 MSAs MSAs >90% Growth potential of insured lives in the US 12 4 MSAs MSAs Low Low High Quest brand presence Expanding access with
Slide 14: Expanding focus beyond independent physicians to enterprise accounts
Physicians We continue to expand our focus beyond independent physicians to include enterprise accounts Physician employment trends Executives/Influencers Independent 26% 25% 22% 31% -11% CAGR 35% Corporate 23% entity 22% 22% 20% +8% CAGR • C-Suite, executive leaders, influencers of lab decisions 17
Slide 15: Hospitals continue to face headwinds and value scaled providers
Hospitals Hospitals continue to face headwinds and value scaled providers Wage and supply Workforce Cost inflation shortages of capital 15
Slide 16: A diverse, collaborative approach for helping hospitals
Hospitals We have a diverse, collaborative approach for helping hospitals improve quality, efficiency and access capital Reference testing Collaborative Lab Outreach/JVs Solutions (CoLab) • Comprehensive menu • Access to capital to across continuum of • Professional lab invest in core assets care fo
Slide 17: Strong double-digit growth in key high-growth areas
Expand in high-growth areas We are positioned to deliver strong double-digit growth in key high-growth areas Consumer Life Sciences Analytics • ~$100M in revenue • ~$90M in revenue • ~$40M in revenue (direct sales + channel partners) • Phase I – IV decentralized • Cross channel • Questhealth.com con
Slide 18: Advanced diagnostic tests in 5 key clinical areas
Advanced Diagnostics We expect new and existing advanced diagnostic tests in 5 key clinical areas to deliver double-digit growth Oncology Advanced Women’s & Brain Autoimmune Cardiometabolic Reproductive Health Disorders Health Health • Haystack MRD • ApoB • QNatal® Advanced • AD-Detect • ANAlyzeR pr
Slide 19: People, operations and technology drive customer experience and excellence
ERIENCE A EXP ND M ER CO S TO T S Engaged people, U People E C X lean processes C R EL Customer-centric and IO highly-engaged employees and technology LE ER driving performance and innovation NC investments SUP E improve quality, productivity, and Enterprise Operations the customer experience Proces
Slide 20: AI and automation for better quality and productivity
AI and automation for better quality and productivity Automated Automated specimen accessioning station preparation Mobile cobots 20
Slide 21: Consistent track record of generating profitable growth
We have had a consistent track record of generating profitable growth over the long term Over the last 5 years we delivered a ~5% revenue CAGR and ~6% adjusted EPS CAGR Revenues Adjusted EPS $ Millions ~5% $9,872 $8.93 ~6% CAGR CAGR $7,726 $6.56 2019 2024 2019 2024 21
Slide 22: Positioned to accelerate revenue and earnings growth
We are well positioned to accelerate revenue and earnings growth Recap of full year 2025 guidance and assumptions 2025 Revenue Guidance 2025 Adjusted EPS Guidance 2025 Guidance Assumptions • ~3% organic revenue growth $10.70B - $10.85B $9.55 - $9.80 • Haystack MRD expected to be slightly less diluti
Slide 23: Balanced approach to capital deployment over the last 10 years
We have had a balanced approach to capital deployment over the last 10 years 2015-2024: Investing in our business while returning capital to shareholders ~$3.6B Capex ~$8.5B Invested ~$4.9B M&A Dividend ~$15.4B increased Cash generated ~$2.8B EVERY YEAR from operations & since 2011 divestitures Divi
Slide 24: We target M&A in 3 key strategic areas
We target M&A in 3 key strategic areas Completed 8 acquisitions in 2024 Regional independent labs Health system outreach labs Capability-building assets NY Physicians Targeted financial criteria Accretive to adj EPS Accretive to ROIC in year 1 (at least 10%) by year 3 24
Slide 25: Long-term outlook beyond 2025
Our long-term outlook beyond 2025 assumes steady revenue and earnings growth 4% - 5% CAGR Total revenues Includes 1% - 2% growth from new acquisitions Operating margins +75 to +150 basis points by the end of 2027 Adjusted EPS* 7% - 9% CAGR Free cash flow Free cash flow growth commensurate with earni
Slide 26: Key takeaways
The clinical lab market is expected to remain strong, driven by health trends and diagnostic innovation We have a proven strategy to generate above market growth in key channels Key takeaways We expect our investments in advanced diagnostics to deliver double-digit revenue growth across 5 key clinic
Slide 27: Note on Non-GAAP Financial Measures
Note on Non-GAAP Financial Measures As used in this presentation the term “reported” refers to measures under accounting principles generally accepted in the United States (“GAAP”). The term “adjusted” refers to non-GAAP operating performance measures that exclude special items such as restructuring
Slide 28: Adjusted diluted EPS from continuing operations
Adjusted diluted EPS from continuing operations The following table reconciles adjusted diluted earnings per share from continuing operations ("Diluted EPS") to reported results under GAAP. Twelve months ended Twelve months ended December 31, December 31, 2025 2019 2024 Low High Diluted EPS - as rep
Slide 29: Adjusted diluted EPS from continuing operations (notes)
Adjusted diluted EPS from continuing operations (a) Income tax impacts were primarily calculated using combined statutory tax rates of 25.5%. (b) Represents costs primarily associated with workforce reductions, systems conversions and integration incurred in connection with further restructuring and
Quest Diagnostics — William Blair 45th Annual Growth Stock Conference 2025 on 6ix