Quest Diagnostics Incorporated · NYSE:DGX
Quest Diagnostics — Investor Day (March 2025)
18 slides from Quest Diagnostics's investor day presentation, Mar 19, 2025
Slide 1: Long-term Financial Outlook
Long-term Financial Outlook Sam Samad Executive Vice President and Chief Financial Officer
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
Long-term outlook beyond 2025: 4% - 5% revenue CAGR and 7% - 9% adjusted EPS CAGR We have a consistent track record of generating profitable growth over the long term Key highlights We have balanced capital deployment priorities with an expectation to return the majority of FCF to shareholders Long-
Slide 4: We have had a consistent track record of generating profitable growth over the long term
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 4 I N V E S T O R D A Y 2 0 2 5
Slide 5: We delivered a solid TSR through a volatile period
We delivered a solid TSR through a volatile period We outperformed the S&P 500 healthcare index over the last several years 5-year TSR 3-year TSR 1-year TSR 80.3% 75.3% 40.1% 40.6% 20.5% 3.8% DGX S&P 500 DGX S&P 500 DGX S&P 500 Healthcare Healthcare Healthcare 2nd quartile performance 2nd decile per
Slide 6: We are well 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 7: We have had a 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 ~$15.4B Dividend Cash generated from operations & ~$2.8B increased every divestitures Dividends year since
Slide 8: Proven track record of returning the majority of FCF to shareholders
Proven track record of returning the majority of FCF to shareholders We have returned the majority of FCF to shareholders nearly every year over the last 10 years FCF ($ millions) $1,830 $1,587 $1,314 $923 $843 $909 $823 $817 $864 $704 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 % of FCF retur
Slide 9: We will maintain a disciplined capital deployment strategy
We will maintain a disciplined capital deployment strategy Expected capital deployment 2025-2027 $4.5B - $5.0B operating cash flow $1.5B - $1.7B capital expenditures (~4.5% of revenue) $3.0B - $3.3B free cash flow ~$1.5B ~$1.0B ~$0.7B acquisitions dividends share repurchases Drives 1%-2% Steady annu
Slide 10: We target M&A in 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 10 I N V E S T O R D A Y 2 0 2
Slide 11: Project Nova: Multi-year investment to modernize our entire order-to-cash process
Project Nova: Multi-year investment to modernize our entire order-to-cash process Unlocks a variety of streamlined benefits including: • Improvements to the customer, employee, and patient experiences • Operational improvements • Reduced technology-related operating costs • Accelerated revenue oppor
Slide 12: Our long-term outlook beyond 2025 assumes steady revenue and earnings growth
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 13: Long-term outlook assumptions beyond 2025
Long-term outlook assumptions beyond 2025 Includes 1% - 2% growth from new acquisitions ~25% tax rate 3% Invigorate savings and productivity enables ~114M shares outstanding 40%+ contribution margin on organic growth Potential return of PAMA cuts captured in the Free cash flow growth commensurate wi
Slide 14: Key takeaways
Long-term outlook beyond 2025: 4% - 5% revenue CAGR and 7% - 9% adjusted EPS CAGR We have a consistent track record of generating profitable growth over the long term Key takeaways We have balanced capital deployment priorities with an expectation to return the majority of FCF to shareholders Long-t
Slide 15: 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 16: 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 17: Adjusted diluted EPS from continuing operations
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
Slide 18: Free cash flow
Free cash flow The following table reconciles free cash flow to reported results under GAAP (dollars in millions). Twelve months ended December 31, 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025-2027 Net cash provided by operating activities $ 967 $ 1,116 $ 1,175 $ 1,200 $ 1,243 $ 2,005 $ 2,