LABCORP HOLDINGS INC. (LH) Business
This page reproduces the company's own Item 1 Business text from the linked SEC filing. It is filer text, not grepcent analysis, scoring, or investment advice.
Informational only - not investment advice. See Disclaimer.
Item 1. BUSINESS
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. These strengths are critical to the Company’s ability to carry out its mission to improve health and improve lives.
Enterprise Strategy
Through leadership in science, technology and innovation, the Company provides vital information and services to help its customers make clear and confident decisions to improve health and improve lives.
The Company is expanding its role in the rapidly evolving healthcare market by strengthening its positions across its portfolio of capabilities, growing strategic opportunities that drive new business, and differentiating its unique offerings. 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 | 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 Company believes it is an attractive partner for hospitals, health systems, and local and regional laboratories due to its: ◦innovative offerings in high‑growth specialty areas;◦industry‑leading test portfolio and national presence;◦differentiated data and analytics capabilities; and◦proven track record of integrating laboratory services. | •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. •The Company has demonstrated its ability to deliver comprehensive specialty testing portfolios in these four areas, which collectively account for more than half of the clinical trials supported by its Central Laboratory business.•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. |
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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 | |
|---|---|---|
| •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.•As healthcare evolves towards increased personalization, the Company will leverage its scientific expertise, customer relationships, and operational excellence to lead in both cell and gene therapy development and in the scaling of other precision diagnostics. | •Consumerism trends, including increased demand for choice, convenience, and transparency, continue to influence the healthcare landscape and create opportunities to engage patients more directly. •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.•The Company believes its scale, scientific expertise, and broad customer relationships position it to expand its consumer‑centric offerings over time to address evolving patient needs.•During 2025, the Company further advanced these capabilities by launching nationwide self-collection options for human papillomavirus and sexually transmitted infection testing. |
| Expand Global Reach, Including Through CDx |
|---|
| •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.•As its pipeline of specialty diagnostics grows, the Company seeks to leverage a differentiated set of capabilities to support international expansion, including:◦a global central laboratory footprint;◦innovative science and technology;◦a comprehensive and competitive testing portfolio; and◦deep customer relationships across diagnostics and biopharma laboratory services.•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.•In addition, the Company continues to maintain a broad global footprint within BLS.•The Company believes these capabilities support its ability to serve as an end‑to‑end partner to biopharma customers and to drive further targeted growth internationally over time. |
The Company’s Business
The Company provides its services to a broad range of customers across Dx and BLS. The primary payer groups serviced by the Company include:
•Clients. Physicians and other healthcare providers who are authorized to order clinical laboratory testing for their patients are a primary source of requests for Dx’s testing services. These physicians and other providers may practice in a range of settings, including hospitals, health systems, small medical practices, community-based clinics, and large, multidisciplinary organizations.
•Third Party. Third party represents health plans, including MCOs, employer plans, and other health insurance providers, each of which operates on a national, regional, or local basis.
•Medicare/Medicaid. This portfolio relates to services provided to participants in federal healthcare programs. Medicare principally serves patients who are age 65 and older, and Medicaid principally serves low-income and disabled patients.
•Patients. Patients are the individuals who receive the clinical laboratory testing and related services offered by the Company.
•Pharmaceutical, Biotechnology, Medical Device, Diagnostic Companies, and CROs. The Company provides services to hundreds of pharmaceutical, biotechnology, medical device, diagnostics companies, and CROs ranging from the world’s largest multi-nationals to emerging, small, and mid-market companies.
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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:
| Year Ended December 31, 2025 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| North America | Europe | Other | Total | ||||||||||||
| Dx: | |||||||||||||||
| Clients | 23 | % | — | % | — | % | 23 | % | |||||||
| Patients | 10 | % | — | % | — | % | 10 | % | |||||||
| Medicare and Medicaid | 8 | % | — | % | — | % | 8 | % | |||||||
| Third party | 37 | % | — | % | — | % | 37 | % | |||||||
| Total Dx revenues | 78 | % | — | % | — | % | 78 | % | |||||||
| BLS: | |||||||||||||||
| Pharmaceutical, biotechnology, medical device, and diagnostic companies, and CROs | 9 | % | 9 | % | 4 | % | 22 | % | |||||||
| Total revenues | 87 | % | 9 | % | 4 | % | 100 | % |
Diagnostics Laboratories Segment
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. Testing ordered by physicians and other healthcare providers who provide healthcare services represents the largest portion of the clinical laboratory market, and Dx supports this demand through an expansive test menu that includes clinical, anatomic pathology, genetic, and genomic tests. In addition, Dx performs testing for a wide range of other customers and purposes, including employment and occupational testing, deoxyribonucleic acid testing, environmental testing, wellness testing, toxicology testing, pain management testing, and medical drug monitoring. The Company regularly introduces new tests and enhances existing methodologies to support patient care.
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The Dx business operates through the following core capabilities:
| Service | Key Features |
|---|---|
| Testing Operations and Productivity | •Operates a network of PSCs and in‑office phlebotomy locations that provide specimen collection services.•Maintains a comprehensive, nimble supply chain to transfer specimens across the entire life cycle of a patient sample.•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.•Adheres to rigorous quality standards, with 26 regional and specialty laboratories holding ISO 15189 certification and one laboratory holding ISO 13485 certification. |
| Testing and Related Services | •Standard Testing Services: 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: 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: 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. |
| Development of New Tests | •Launched more than 130 new tests in 2025.•Maintains an active diagnostics and therapeutics research division, producing approximately 1,000 studies, articles, and presentations in 2025.•Continues to invest in new testing technologies and advanced testing capabilities, including those relating to significant growth areas, such as oncology, women’s health, autoimmune disease, and neurology. |
| Technology-Enabled Services and Support | The Company provides a range of technology-enabled services and support designed to enhance the customer and patient experience and provide convenient access to data, analytics, and clinical insights, including:•Digital Pathology Solutions: Technology‑enabled pathology platforms that support the digitization, centralized review, and sharing of pathology slides, enabling remote collaboration, scalable access to pathology data, and enhanced consistency across diagnostic workflows and clinical trials.•Provider and Payer Digital Platforms: Online applications for providers, MCOs, and ACOs to obtain test results and population and health management data.•CDS Reporting: Analytics-enabled reporting solutions, with nearly 10 million enhanced CDS reports delivered to physicians and health systems to support clinical decision-making.•Patient‑facing Digital Applications: Online and mobile applications that allow patients to learn about the Company’s offerings, schedule PSC visits, check in upon arrival, complete documentation, access tests and test results, and manage their accounts.•Generative AI‑enabled Test Selection (Test Finder): A generative AI‑enabled tool that supports laboratory test search and selection by allowing providers to use plain‑language prompts to identify clinically relevant tests and related information. Test Finder is available on Labcorp.com and integrated into Labcorp Diagnostic Assistant™, enabling access to test information within the clinical workflow. |
Payment for Clinical Laboratory Services
Clinical laboratories submit bills for tests and other related services and are reimbursed by the applicable responsible party, which include third-party payers, clients, Medicare and Medicaid, and patients.
Third party payments come primarily from MCOs, with the majority of such payments made on a fee-for-service basis, and a smaller portion through capitation agreements under which payment is made pursuant to a negotiated per-member, per-month payment for an agreed upon menu of tests, or based upon the proportionate share earned by Dx from a capitation pool.
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Clients include physicians, hospitals, health systems, ACOs, employers, and other entities who pay for testing services ordered by or on behalf of the applicable entity. Patients who are members of commercial insurance or participate in a governmental health program pay for amounts that are not covered by their applicable payer (e.g., coinsurance, deductibles, and non-covered services), and uninsured patients pay according to Dx’s patient fee schedules; in addition, consumers pay directly for tests purchased through Labcorp OnDemand.
Medicare and Medicaid include fee-for-service revenue from traditional Medicare and Medicaid programs based on the fee schedule established by the related government authority. For participants in managed Medicare and managed Medicaid plans, laboratory bills are submitted to and paid by MCOs that manage those plans.
U.S. Reimbursement and Market Dynamics Affecting the Clinical Laboratory Business
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.
Fees for most laboratory services reimbursed by Medicare are established in the CLFS. Fees for other Medicare-reimbursed testing, primarily related to pathology, are established by the PFS. Dx has experienced governmental reimbursement reductions through a combination of reductions to fee schedules, incentives to physicians to participate in alternative payment models such as risk-sharing and new methods to establish and adjust fees. In addition, greater price transparency required under “surprise billing” laws and regulations may also lead to reductions in reimbursement for laboratory services.
The most significant of these developments was PAMA. 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. Among other things, 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.
In addition to governmental reimbursement pressures, market-based dynamics continue to affect the clinical laboratory industry. Reimbursement from commercial payers for diagnostic testing may increasingly shift away from traditional, fee-for-service models to alternatives, including value-based, bundled pay-for-performance, and other risk-sharing payment models. The growth of the managed care sector and consolidation of MCOs present various challenges and opportunities to Dx and other clinical laboratories. Dx’s ability to attract and retain MCO customers has become even more important as the impact of various healthcare reform initiatives continues, including expanded health insurance exchanges and ACOs.
In addition to reductions in test reimbursement, the Company could also experience potential declines in test volumes due to increased controls over the utilization of laboratory services by Medicare, Medicaid, and third-party payers. MCOs are implementing, directly or through third parties, various ways to more closely monitor and reduce the volume and expense of laboratory testing. This includes utilization management efforts, such as requiring prior authorization from the MCO before certain tests can be performed. In addition, many MCOs have laboratory benefit management programs, which may include laboratory networks in which only designated laboratories may be used by members to receive full coverage benefits, and claims edits, which impact coverage and reimbursement. Some of these programs address clinical laboratory testing broadly, while others are focused on certain types of testing, including molecular, genetic, and toxicology testing. In addition, continued movement by patients into consumer-driven health plans may have an impact on the utilization of laboratory testing.
Helping to balance the overall negative market changes regarding reimbursement and test volume discussed above, the Company believes that the clinical laboratory testing market is positively influenced by several factors. Such factors include ongoing scientific and technological advancements, the increasing availability of diagnostic tests to a broader range of providers and patients, improvements in operational efficiency, and demographic trends such as the aging of the U.S. population, which tends to drive higher utilization of healthcare services. Periodic infectious disease outbreaks such as the SARS-CoV-2 virus also enhance stakeholders’ awareness of and appreciation for the value of laboratory testing in combating future potential outbreaks and in improving patient care and outcomes.
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Dx believes that its comprehensive and expanding test menu, focus on high-growth clinical areas, leading position in companion diagnostics, broad geographic footprint, and operating efficiency position it to compete effectively in this evolving environment.
Market Opportunity for Dx
Based on Company estimates, in 2025, the U.S. clinical laboratory testing industry generated revenues of more than $80 billion. The clinical 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. In addition, an increasing number of health system laboratories have expanded their operations and business, resulting in greater competition for testing from physicians within those systems and from unaffiliated physicians in the health system laboratories’ service area.
Dx believes that the selection of a laboratory is primarily based on the following factors, all of which the Company believes Dx competes favorably in:
| •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; and |
| •quality, timeliness, and consistency in reporting test results; | •pricing of the laboratory’s services. |
| •national scale and local presence with access to testing within 10 miles of most households; |
In addition to the factors listed above, the Company believes that the operational and economic efficiencies provided by its integrated service and logistics network, large-scale automated testing, and ongoing introduction of new technologies will position the Company to compete effectively with other providers of laboratory services.
Biopharma Laboratory Services Segment
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. Through its industry‑leading Central Laboratory business, BLS supports clinical trial activity in approximately 100 countries.
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The BLS business operates through the following core capabilities:
| Service | Key Features |
|---|---|
| Early Development Research Laboratories | •Lead optimization: Solutions that connect early discovery activities to regulated preclinical studies.•Analytical services: Bioanalytical testing services designed to support appropriate closing and frequency of drug administration.•Safety assessment: General, genetic, and immunotoxicology services; non-clinical pathology; safety pharmacology services; respiratory services; and DART studies.•Chemistry manufacturing services: Cost-effective solutions in the areas of safety, identity, strength, quality, and purity assessments for biologics.•Early phase development solutions: Multidisciplinary teams of experts that deliver integrated solutions to identify and develop lead drug candidates and reduce development challenges.•Crop protection and chemical testing: Consulting services for chemical manufacturers and other firms engaged in the development of modern crop protection technology. |
| Central Laboratory | •Provides clinical laboratory services for clinical trials, providing data to determine if new therapies are safe and effective.•Delivers 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.•Operates the world’s largest automated clinical trial sample collection kit production with 5.5 sigma precision to enable consistent, protocol-specific specimen collections.•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.•Provides proprietary digital tools and data services that deliver consistent data reporting, submission ready data packages, and insight driven data services that help streamline and accelerate clinical trials. This includes 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.•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. |
Market Opportunity for BLS
Based on Company estimates, in 2025, the global pharmaceutical industry spent more than $200 billion on R&D. Drug development services businesses like BLS typically derive most of their revenue from R&D expenditures, as well as marketing expenditures, of the pharmaceutical and biotechnology industries.
Outsourcing of R&D services to third‑party providers remains integral to the drug development process. Pharmaceutical and biotechnology companies continue to face pressure to improve return on investment, increase R&D productivity, keep pace with rapid scientific advancement, comply with evolving regulatory requirements, and respond to efforts to control prescription drug pricing. The pharmaceutical market will continue to feel the pressure to improve return on investment, increase R&D productivity, stay abreast of scientific advancements and comply with stringent government regulations and attempts to reduce and control the price of prescription drugs, all supporting the outsourcing model. In the face of mounting complexity, the investment and amount of time required to develop new products are significant and have been increasing. These trends create opportunities for BLS and other companies providing drug development services that can help make the development process more efficient.
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.
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BLS believes that the selection of a drug development partner is primarily based on the following factors, all of which the Company believes it competes favorably in:
| •reputation for quality and regulatory compliance; | •strengths in various geographic markets; |
|---|---|
| •efficient, timely performance; | •price; |
| •expertise and experience in operations; | •quality of facilities; |
| •application of technology and innovation; | •quality of relationships; |
| •specific therapeutic and scientific expertise; | •size and scale; |
| •data and analytical capabilities; | •ability to support decentralized clinical trials; |
| •ability to enhance patient recruitment; | •ability to develop CDx; and |
| •scope of service offerings; | •access to talent. |
Other Information
Capital Deployment
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.
During 2025, the Company invested $582.0 million in strategic business acquisitions. These acquisitions have enhanced the Company’s service offerings, expanded its customer and revenue mix, and strengthened and broadened the scope of its geographic presence. The Company continues to evaluate acquisition opportunities that leverage the Company’s core competencies, complement existing scientific and technological capabilities, increase the Company’s presence in key geographic, therapeutic and strategic areas, and meet or exceed the Company’s financial criteria.
The Company also returned capital to shareholders during 2025 through the repurchase of 1.8 million shares of its common stock, par value $0.10 per share (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.
The Company will continue to evaluate opportunities for the strategic deployment of capital, taking into account market conditions, business priorities, and shareholder returns.
Marketing, Sales, and Customer Service
The Company’s marketing, sales, and customer service functions support customer acquisition and retention and relationship management.
The marketing organization develops and executes strategies to drive business growth by understanding customer and market needs, differentiating the Company, and promoting offerings through various channels, including websites, digital and social media, sales materials, and events. The marketing organization collaborates with the scientific, medical, sales, and customer service organizations to commercialize new offerings, introduce them to customers, and support their use.
The Dx sales and customer service organizations are structured around distinct market groups to better understand and address the different needs of each customer segment. This includes clinical specialties—such as primary care, oncology, women’s health, autoimmune disease, neurology, infectious disease, endocrinology, gastroenterology, rheumatology, and other specialties—as well as payer and customer organization, including ACOs, MCOs, consumers, employers, physicians, and hospitals and health systems.
The BLS global sales and customer service organizations provide customer coverage primarily to pharmaceutical and biotechnology companies, supporting services that span lead optimization, preclinical safety assessment, analytical services, clinical trial enablement through data insights, central laboratory services, biomarker testing, CDx, and technology-enabled solutions.
As part of the Company’s ongoing strategic priority to maximize the value of its unique leadership in both Dx and BLS, representatives from each segment work together to cross-promote the Company’s services to customers of each segment, such as enabling hospitals, health systems, and physicians with opportunities to participate in clinical trials, or informing
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pharmaceutical, biotechnology, or medical device companies about how the Company’s capabilities in specialty testing, real-world data solutions, CDx, and PSCs can support the development of new therapies and medical devices.
Human Capital
Mission and Culture
The Company believes in the power of science to change lives. The Company’s culture centers around its mission to improve health and improve lives. The Company’s nearly 71,000 employees located across 17 countries are essential to the Company’s ability to innovate and advance science and technology to empower patients, providers, and pharmaceutical companies to make clear and confident decisions. Engaging the collective expertise and passion of its employees across the globe is vital to achieving the Company’s mission. In addition, Labcorp’s five Core Values—Mission Driven, Customer Centered, Innovative, Agile, and Operationally Excellent—serve as the foundation of its culture and are the fundamental principles that guide how the Company’s employees work together.
Workforce Demographics
The Company’s global talent is core to its ability to innovate and meet a wide range of patient and customer needs. The Company’s employees are globally dispersed, with 89% in the U.S. and Canada, 5% in Asia, and 6% in Europe at December 31, 2025. Of the Company’s global workforce, 87% of employees are full-time, and 13% are part-time. Approximately 71% of the Company’s employees globally are women. Of the U.S.-based employees, approximately 53% of the team are non-Caucasian. Approximately 3% of the Company's global workforce is employed under a collective bargaining agreement. To maintain operational flexibility and respond to changing business demand and talent availability, the Company supplements its workforce with contingent workers, who represent up to an additional 8% of the total workforce.
Talent Initiatives
The Company’s talent initiatives support the development of inclusive leadership and culture, enhance the team member experience, and support community engagement and patient focus. Highlights from 2025 include:
•Launched Impact, a global program designed to enhance employee engagement by creating an inclusive process for recognizing service milestones and impactful achievements;
•Introduced an AI learning hub to drive workforce enablement and adoption by building foundational capabilities, accelerating readiness, and supporting future innovation;
•Expanded our listening strategy, which measures employee experience, inclusion, and well-being;
•Accelerated leadership excellence by developing an enterprise-wide framework that defines critical competencies, success profiles, and interview guides aligned to the Company’s values, creating a foundation for talent development and leadership effectiveness;
•Supported the Company’s ERGs, which are created and led by employee volunteers and open to all employees. ERGs are important resources to foster cross-connections, encourage belonging, support career development, and champion employee voices. Each ERG has executive sponsorship from senior leadership;
•Created inclusion training for new hires and to support our leaders in fostering an environment of trust, respect, and belonging, where everyone can do their best work;
•Established partnerships to improve the outcomes and experiences of veterans and individuals with disabilities including with respect to hiring and retention;
•Provided opportunities for greater engagement between employees and management, including quarterly global town halls, which are held virtually and are open to all employees, interactions with front-line employees on visits to the Company’s facilities, and in-person town halls with employees across business units and functions;
•Received inaugural Forbes America’s Best Employers for Company Culture 2025 award.
Rewards
The Company operates in a complex, global, and dynamic healthcare industry and believes that its compensation and benefits programs are comprehensive and flexible to attract and retain the caliber of talent needed for the sustained growth and success of the business. The Company regularly monitors market activity and employee movement within and outside of the healthcare industry to maintain competitiveness. In 2025, the Company awarded $103 million in annual merit increases to recognize its talent and foster pay competitiveness in the market. Additionally, the Company 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 who are essential to delivering on its commitment to patients and customers.
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Employee Well-being
The Company believes that its investments in compensation and employee well-being are crucial to maintaining comprehensive positioning and a productive, engaged workforce. The Company fulfills its commitment to employee well-being by investing in a variety of holistic tools and resources to support its employees’ physical, emotional, and financial well-being.
The Company continues to offer zero-cost telehealth, including free virtual primary care visits for medical, dermatological, and behavioral treatment as part of its medical plans in the U.S., employer-matched 401(k) contributions, and financial wellness workshops. The Company provides various wellness programs to support the wellbeing of its employees and their families. The Company also understands the importance of providing mental health resources to support employees and their families and offers a global employee assistance program solution to support employee mental health and offers free Mental Health First Aid training for all people leaders to better support individual emotional well-being while at work.
The Company’s No Charge Laboratory Testing program enables eligible U.S. employees and their covered dependents to offset any outstanding balance for most lab work sent to a Company lab, following insurance claim processing. Additionally, the Company offers global initiatives to encourage sustainable transportation through programs such as discounted transportation vouchers, reduced-cost bicycle leases, and mileage reimbursement for bicycle commuters, with benefits varying by country.
Development and Training
As an organization that pursues answers to the world’s most critical healthcare questions, the Company supports its employees with a work environment that emphasizes continuous learning and development. Through these learning and development opportunities, the Company encourages learning, growth, and innovation to deliver better patient care and new solutions for its customers. The Company provides professional skills training and role specific training, along with formal and informal mentoring and job rotations. The Company onboards and develops new hires through extensive training provided by a dedicated team of technical skill trainers with different departments and functions.
The Company’s ongoing investment in the development of its people stems from a continuing commitment to build a highly talented team. In addition to traditional tuition reimbursement, over the past five years Labcorp Education Advantage has actively supported employees in their pursuit of higher education by covering tuition costs for healthcare or life science degree programs that contribute to their career advancement within the Company.
Health and Safety
The nature of the Company’s business requires employees to work directly with patients and animals. This includes the handling, processing, and testing of human or animal specimens on a daily basis. As the health and safety of employees is a primary concern, the Company has established numerous employee health and safety protocols, including engineering and administrative controls, policies, procedures, processes, and training to minimize the potential for, and the severity of, work-related injuries and illnesses.
Community Engagement
Labcorp fosters a culture of giving back through its Access for All initiative and the work of The Labcorp Charitable Foundation (The Foundation), focusing on expanding access to healthcare, education, housing, and Science, Technology, Engineering, and Mathematics opportunities in underserved communities. In 2025, employees contributed by building homes, collecting food, serving meals, and supporting patient assistance and community health programs. The Foundation—a private, charitable 501(c)(3) organization established and supported by the Company—made charitable contributions to more than 190 programs worldwide, including a partnership with Project HOPE to broaden rural healthcare access both internationally and in the U.S. The Foundation also supported disaster relief through the American Red Cross and matched employee donations to humanitarian organizations. To further employee impact, Labcorp offered programs that matched eligible employee donations and awarded grants to charities in recognition of employees’ board or volunteer service.
Quality
Dx and BLS have comprehensive quality systems and processes appropriate for their respective businesses. The Company’s quality programs are overseen by Dx’s National Office of Quality, BLS’s Global Regulatory Compliance and Quality Assurance Unit, BLS’s Central Laboratory business expanded laboratory management services department, and the Company’s global supply chain management department and project management staff. The Company has procedures for monitoring its internal performance, as well as the performance of its vendors, suppliers, and other key stakeholders. In addition, various groups and departments within the Company provide oversight to monitor and control vendor products and performance and play an essential role in the Company’s approach to quality through improvements in processes and automation.
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Virtually all facets of the Company’s services are subject to quality programs and procedures, including accuracy and reproducibility of tests, turnaround time, customer service, marketing communications, data integrity, patient satisfaction, and billing. The Company’s quality programs include measures that compare current performance against desired performance goals to monitor critical aspects of service to its customers and patients. This includes licensing, credentialing, training, competency assessments of professional and technical staff, and internal auditing. In addition to the Company’s own quality programs, the Company’s laboratories, facilities, and processes are subject to on-site regulatory agency inspections and accreditation evaluations, surveys and proficiency testing by local or national government bodies and independent external accrediting programs, and inspections and audits by customers.
At December 31, 2025, thirty-nine of the Company’s laboratories have received ISO 15189 and/or ISO 13485 accreditation, demonstrating that they meet international standards for quality and technical competence.
Compliance
The Company operates a global compliance program that continually assesses and monitors adherence to legal requirements in the U.S. and other countries where it does business. The objective of the program is to prevent, detect, and address any compliance-related issues through the design, implementation, and ongoing review of compliance safeguards and controls, as needed. While the Company complies with a broad range of laws and regulations, the program places special emphasis on those related to healthcare fraud and abuse, anti-kickback and physician self-referral prohibitions, government reimbursement, data privacy, anti-bribery and anti-corruption, anti-human trafficking, and trade sanctions. The program includes robust policies and procedures, comprehensive training for personnel, risk assessments, regular monitoring and audits, and systems for reporting and investigating possible compliance violations. These efforts, along with Ethisphere’s 2025 Compliance Leader Verification, affirm the Company’s commitment to high ethical standards and integrity in its operations.
The Company also strives to comply with all relevant laws, regulations, and requirements applicable to its clinical laboratory and biopharma laboratory services. However, these industries operate under complex regulatory frameworks, and courts and regulatory authorities have yet to interpret many of the relevant laws. As advances in clinical testing, healthcare technology, and organizational structures emerge, some laws, regulations, or requirements may become unclear or subject to new interpretations or applications by prosecutors, regulators, judges, or other persons in similar roles. New or changed interpretations could adversely impact the Company’s operations and failing to comply with applicable mandates can result in severe civil and criminal penalties, fines, exclusion from government healthcare programs, and revocation of licenses and certifications, which could significantly harm the Company’s business.
Information Technology
Information Systems
The Company is committed to developing and commercializing technology-enabled solutions it believes will support its operations and provide better care. The Company operates standard platforms for its core business services and its financial and reporting systems. These standard systems provide consistency within workflows and information, as well as a high level of system availability, security, and stability. The primary laboratory systems include standardized support for molecular diagnostics, digital pathology, and enhanced specialty laboratory solutions. The Company’s centralized information systems are responsible for operational efficiencies, enabling the Company to achieve consistent, structured, and standardized operating results and effective patient care.
The Company’s cybersecurity processes and systems are discussed in more detail under “Cybersecurity” in Item 1C.
Artificial Intelligence
For several years, the Company has deployed AI and machine learning tools to supplement its existing data analysis projects and support greater efficiency in its operations. The Company is integrating AI to enhance operational efficiency, support clinical decision‑making, and advance innovation across Dx and BLS. The Company deploys AI‑enabled tools to augment data analytics, streamline workflows, and improve access to clinically relevant information for healthcare providers, while also exploring additional applications to support research, digital pathology, and enterprise productivity.
The Company approaches the use of AI with an emphasis on responsible deployment, supported by governance structures, ethical guidelines, and cross‑functional oversight designed to promote transparency, data protection, and appropriate use of AI technologies. The Company has established an AI governance structure that includes oversight by the Board, an AI Code of Ethics, and an ethics board that is comprised of members from compliance, law, information technology, security, and other departments. This ethics board is dedicated to identifying and mitigating ethical risks in the design, development, and use of AI by Labcorp and its vendors and subcontractors. Within this governance structure, AI is defined as a suite of technologies and algorithms that, for explicit or implicit objectives, infer, from the input received, how to generate outputs such as predictions, content, recommendations, or decisions.
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Intellectual Property Rights
The Company relies on a combination of patents, trademarks, copyrights, trade secrets, and confidentiality and non‑competition agreements to establish and protect its proprietary technology. The Company has filed and obtained numerous patents in the U.S. and internationally and regularly files additional patent applications, when appropriate, to further protect its proprietary technologies. In certain circumstances, the Company also licenses patents, patent applications, technologies, trade secrets, know‑how, copyrights, and trademarks owned by third parties in the U.S. and abroad. The Company believes, however, that no single patent, technology, trademark, intellectual property asset, or license is material to its business as a whole.
Sustainability
Labcorp’s commitment to environmental sustainability is rooted in its broader mission to improve both human and environmental health. The Company continues to advance energy efficiency, emissions reduction, and responsible supply chain management across its global operations. Labcorp is progressing toward its multi-year environmental goals, including the commitments made in 2023 through the Science Based Targets initiative with approved goals to reduce absolute Scope 1 and 2 greenhouse gas emissions by 42% and to reduce Scope 3 emissions by 25% by 2030 using baseline 2020. Additionally, Labcorp continues to participate in external ratings, has earned an A- score from CDP, and received a Silver rating from Ecovadis, reflecting its continued progress and transparency in environmental stewardship.
Regulation
Because the Company operates multiple business lines across numerous jurisdictions worldwide, it is subject to a wide range of regulatory requirements. Both the clinical laboratory and biopharma laboratory businesses are subject to significant governmental regulation at the international, national, state, and local levels. As described below, certain regulations concern licensure and operation of clinical laboratories, claims submission and reimbursement for laboratory services, healthcare fraud and abuse, biopharma laboratory services, security and confidentiality of health information, quality, and environmental and occupational safety.
| Regulation of Clinical Laboratories |
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| Clinical laboratories operating in the U.S. must be certified by the federal government or by a federally approved accreditation organization. In most cases, that certification is regulated by CMS through CLIA, which requires that applicable clinical laboratories meet quality assurance, quality control, and personnel standards. Laboratories also must undergo proficiency testing and are subject to inspections. Clinical laboratories in locations other than the U.S. are generally subject to comparable regulation in their respective jurisdictions.The Company is also subject to state and local laboratory regulations. State laws may require that laboratory personnel meet certain qualifications, specify certain quality controls, or require maintenance of certain records.The sanctions for failure to comply with CLIA requirements may include suspension, revocation, or limitation of a laboratory’s CLIA certificate, cancellation or suspension of the laboratory’s approval to receive Medicare or Medicaid reimbursement, as well as significant fines and civil and/or criminal penalties. |
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| Regulatory Agency Laws and Regulations |
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| Various regulatory agencies, including CMS and the FDA in the U.S., regulate the development, testing, manufacturing, marketing, distribution, storage, import, export, and performance of the Company’s diagnostic and therapeutic offerings. These agencies also regulate key aspects of BLS’s therapeutic product development-related services that comprise the majority of its business. Outside the U.S., the Company is subject to similar regulations, including the EU IVDR, which imposes classification, quality, and safety standards. Compliance with these evolving international frameworks may increase costs and affect the Company’s ability to support clinical trials and offer laboratory services.The FDA and other regulatory agencies periodically inspect and review the manufacturing processes and performance of diagnostic and therapeutic products, while CMS, certain state programs, and accreditation entities inspect and review the facilities, personnel, and procedures of clinical laboratories and their laboratory operations. The FDA and other regulatory agencies also periodically inspect test facilities that perform tests on samples from preclinical studies and on human subjects enrolled in such clinical studies of drugs, biologics, and medical devices. These agencies have the authority to take various administrative and legal actions for noncompliance, such as imposing fines, withdrawing product approval, or issuing warning or untitled letters, seizures, recalls, injunctions, and other civil and criminal sanctions.BLS’s laboratory facilities and Dx’s clinical laboratory facilities that perform testing services in support of preclinical studies and clinical trials must conform to a range of standards and regulations, including GLP and GCP, cGMP, human subject protection, investigational product exemption regulations, and quality system regulation requirements, as applicable. The preclinical and clinical testing intended to support applications for research or marketing is subject to periodic inspections by the FDA, and by pharmaceutical and medical device regulators in the jurisdictions where the Company operates, including, the MHRA, the EU, the European Medicines Agency, the National Medical Products Administration in China, and the Pharmaceuticals and Medical Devices Agency in Japan. These inspections assess compliance with GLP, GCP, and cGMP, and other applicable regulatory standards. If regulators identify deficiencies in the Company’s equipment, facilities, laboratories, operations during an inspection, they may issue a formal notice of inspectional observations (e.g., FDA Form 483). If the Company does not address these findings satisfactorily, the agency may escalate to a warning letter or other similar enforcement actions. Noncompliance may result in unanticipated compliance expenditures and expose the Company to civil, criminal or administrative penalties and/or other remedies against the Company, including suspension of its operations, and related customer contractual claims and other liabilities.Certain BLS services, including chemistry, manufacturing, and controls services, must conform to cGMP standards and are subject to periodic inspections by the FDA, the MHRA, and other global regulatory authorities. If regulators identify deficiencies during an inspection, they may issue a formal notice of its inspectional observations, which may be followed by a warning letter if observations are not addressed satisfactorily. Failure to maintain compliance with FDA regulations and other applicable requirements may result in unanticipated compliance expenditures, suspension of operations, enforcement actions, product seizures or recalls, civil, criminal or administrative penalties, and related customer contractual claims and other liabilities. |
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| Animal Welfare Laws and Regulations |
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| The conduct of animal research at BLS’s facilities in the U.S. must be in compliance with the AWA, which governs the care and use of certain warm-blooded animals for research in the U.S. and is enforced through periodic inspections by the USDA. The AWA establishes standards for the care of regulated species, including housing, ventilation, lighting, feeding and watering, handling, veterinary care, and recordkeeping. Licensing and registration requirements are set by the USDA, as well as by comparable regulatory authorities in the EU, the U.K., and China. If these agencies determines that BLS’s equipment, facilities, laboratories, or processes do not comply with applicable standards, they may issue an inspection report documenting the deficiencies and requiring corrective actions. The regulators may impose fines, suspend and/or revoke licenses and registrations, or confiscate research animals. In addition, certain of BLS’s animal related activities may be subject to regulation by the U.S. Centers for Disease Control and Prevention, the Office of Laboratory Animal Welfare of the National Institutes of Health, the U.S. Fish and Wildlife Service, and similar organizations in other jurisdictions in which the Company operates. |
| Security, Privacy, and Confidentiality of Health Information and Other Personal Information |
| The Company and its third party service providers are subject to laws and regulations related to protecting the privacy and security of personal information, as well as national security concerns relating to cross-border access to personal information. In the U.S., HIPAA governs the security and confidentiality of certain health information in a manner designed to improve the efficiency and effectiveness of the healthcare system by facilitating the electronic exchange of information in certain financial and administrative transactions. HIPAA applies to health plans, healthcare providers, including laboratories that conduct standard transactions electronically, and healthcare clearinghouses as well as their “business associates” as defined in HIPAA. In addition to the existing requirements under HIPAA, HHS recently proposed revisions to the HIPAA security regulations, which, if adopted, would impose increased requirements on regulated entities such as the Company.Violations of the HIPAA provisions could result in civil and/or criminal penalties, including significant fines and up to 10 years in prison. HHS also conducts periodic audits to confirm compliance and authorizes state attorneys general to bring civil actions seeking either injunctions or damages in response to violations of the HIPAA privacy and security regulations. HIPAA establishes a “floor” and does not supersede laws that are more stringent. In addition to the laws and regulations described above, the Company may need to comply with numerous other state and federal consumer protection, data protection, international data transfers, privacy and similar laws that govern the confidentiality, security, use, and disclosure of personal information, as well as breach notification responsibilities. To the extent applicable, newer laws such as the CCPA, the Washington My Health My Data Act, and similar consumer privacy laws in other states, may impose additional obligations to the Company. These laws vary in scope and by jurisdiction, but they most commonly regulate or restrict the collection, use, and disclosure of medical and financial information and other personal information. The Company may also be required to comply with national security and international data protection regulations, such as the EU GDPR, U.K. GDPR, and DOJ’s Data Security Program, that address access, use, disclosure, protection, and transfer of personal data in regions where the Company does business or restrict access to specific types of personal data from countries of concern identified by or pursuant to U.S. regulations, including China. Potential fines and penalties for non-compliance with U.S. and international privacy, security, data protection, and similar laws could have a material adverse effect on the Company’s business. |
| Environment, Health, Safety, and Sustainability |
| The Company is subject to licensing and requirements under laws and regulations relating to the protection of the environment and employee health and safety. These laws and regulations, designed to minimize risk to employee health and safety and to the environment, include the safe handling, use, transportation, and disposal of potentially infectious and hazardous materials; the assessment of potential work-related risks and establishment of work practice and engineering controls, and providing protective clothing and equipment, training, and medical surveillance. |
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| Fraud and Abuse Laws and Regulations |
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| Existing U.S. laws governing federal healthcare programs, including Medicare and Medicaid, as well as similar state laws, impose a variety of broad reaching fraud and abuse prohibitions on healthcare providers, including clinical laboratories. These laws are interpreted expansively and enforced aggressively by multiple government agencies, including the DOJ, OIG, CMS, and various state agencies. Historically, the clinical laboratory industry has been the focus of major governmental enforcement initiatives.The U.S. Anti-Kickback Statute prohibits knowingly providing anything of value in return for, or to induce the referral of, Medicare, Medicaid, or other U.S. federal healthcare program business. Violations can result in imprisonment, fines, penalties, and/or exclusion from participation in U.S. federal healthcare programs.Under another U.S. statute, known as the “Stark” physician self-referral law, physicians who have a financial relationship with a clinical laboratory may not refer Medicare or Medicaid covered testing to the laboratory unless an exception applies, and laboratories may not bill Medicare or Medicaid for such prohibited referrals.There are a variety of other types of federal and state fraud and abuse laws, including the False Claims Act and other laws prohibiting submission of false or fraudulent claims to government healthcare programs that require certain companies to disclose payments and other transfers of value to certain healthcare professionals and providers. Sanctions for violations of these laws may include significant criminal and civil fines and penalties, as well as exclusion from participation in Medicare, Medicaid, and other federal or state healthcare programs. |
| Drug Testing |
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| Drug testing for public sector employees is regulated by the SAMHSA, which has established detailed performance and quality standards that laboratories must meet to be approved to perform drug testing on employees of U.S. government contractors and certain other entities. To the extent that the Company’s laboratories perform such testing, each must be certified as meeting SAMHSA standards. The Company’s laboratories in Research Triangle Park, North Carolina; Raritan, New Jersey; Houston, Texas; Southaven, Mississippi; St. Paul, Minnesota; and Portland, Oregon, are all SAMHSA certified. Each laboratory also maintains state licensure and laboratory certifications required to provide testing for private sector employers. |
| Controlled Substances |
| BLS handles controlled substances as part of the services it provides in preclinical testing. The use of controlled substances is regulated by the U.S. Drug Enforcement Administration under the CSA and its implementing regulations. The CSA establishes, among other things, certain registration, security, recordkeeping, reporting, manufacturing, distribution, import, export, and other requirements for controlled substances. The Company seeks to conduct its business in compliance with these requirements as applicable. Violations of these rules may result in criminal and civil fines and penalties. |
Company Reporting
The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports are made available free of charge through the Investor Relations section of the Company’s website at www.labcorp.com as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. Additionally, the SEC maintains a website at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers, including the Company, that file electronically with the SEC.
The matters discussed in this “Business” section should be read in conjunction with the Consolidated Financial Statements found in Item 8 of Part II of this Annual Report, which include additional financial information about the Company. This Annual Report includes forward-looking statements that involve risks or uncertainties. The Company’s results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risk factors described in Item 1A of Part I of this Annual Report and elsewhere. For more information about forward-looking statements, see “Forward-Looking Statements” included prior to Part I in this Annual Report.