AI Takeaway
LH (Labcorp) delivered strong FY2025 results with revenue growing 7.2% to $13.95B, operating income surging 27.4% to $1.38B, and EPS rising 18.6% to $10.54, driven by margin expansion and disciplined cost management.
Revenue
$13.95B
++7.25% YoY
EPS (Basic)
$10.54
++18.56% YoY
Gross Margin
28.8%
++0.90% YoY
Operating Income
$1.38B
++27.42% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
LH grew total revenue by 7.2% year-over-year to $13.95B in FY2025 (from $13.01B in the prior year), reflecting broad-based demand for laboratory and diagnostic services. This growth outpaced cost of revenue growth of 5.9%, signaling improving operational efficiency.
Source: Source: 10-K Income Statement
Operating income jumped 27.4% to $1.38B, with operating margin expanding approximately 157 basis points to 9.9% from 8.4% in the prior year. SG&A expenses declined slightly by 0.6% to $2.22B, demonstrating cost discipline even as revenues scaled.
Source: Source: 10-K Income Statement
Gross profit increased 10.7% to $4.01B, with gross margin improving to 28.8% from 27.9% in the prior year. This improvement reflects favorable revenue mix and cost management in the cost of revenue line.
Source: Source: 10-K Income Statement & Key Ratios
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Upgrade to unlockCash and equivalents fell 65.0% year-over-year to $532.3M in FY2025, driven by aggressive share buybacks ($450M) and investing outflows ($1.19B). While operating cash flow remains healthy at $1.64B, the reduced cash buffer could limit financial flexibility in the event of unexpected disruptions or acquisition opportunities.
Source: Source: 10-K Balance Sheet & Cash Flow Statement
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Upgrade to unlockReported EPS of $4.07 versus the $4.06 analyst consensus — a +0.3% beat for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $13.95B | $13.01B | +7.25% |
Cost of Revenue | $9.94B | $9.38B | +5.91% |
Gross Profit | $4.01B | $3.62B | +10.71% |
Operating Income | $1.38B | $1.09B | +27.42% |
Net Income | $876.5M | $746M | +17.49% |
EPS (Basic) | $10.54 | $8.89 | +18.56% |
EPS (Diluted) | $10.46 | $8.84 | +18.33% |
SG&A Expense | $2.22B | $2.23B | -0.61% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $18.39B | $18.38B | +0.07% |
Current Assets | $4.02B | $4.81B | -16.35% |
Total Liabilities | $9.76B | $10.31B | -5.40% |
Current Liabilities | $2.82B | $3.33B | -15.22% |
Stockholders' Equity | $8.62B | $8.05B | +7.05% |
Cash & Equivalents | $532.3M | $1.52B | -64.95% |
Long-Term Debt | $5.08B | $5.33B | -4.63% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $1.64B | $1.59B | +3.45% |
Investing Cash Flow | $-1.19B | $-1.37B | +12.64% |
Financing Cash Flow | $-1.46B | $779.9M | -286.82% |
Dividends Paid | $240.7M | $243.1M | -0.99% |
Share Buybacks | $450M | $250.1M | +79.93% |
D&A | $681.1M | $643.5M | +5.84% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 28.8% | 27.9% | +0.90% |
Operating Margin | 9.9% | 8.4% | +1.57% |
Net Margin | 6.3% | — | — |
ROE | 10.2% | — | — |
ROA | 4.8% | — | — |
Current Ratio | $1.424 | — | — |
Debt to Equity | $1.132 | — | — |
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LH delivered strong FY2025 results with revenue growing 7.2% to $13.95B and net income rising 17.5% to $876.5M. Operating income surged 27.4% to $1.38B, reflecting significant margin expansion driven by revenue growth outpacing cost increases.
LH reported basic EPS of $10.54 in FY2025, up 18.6% from $8.89 in the prior year. The EPS growth outpaced net income growth of 17.5%, partly due to share count reduction from the company's $450M buyback program.
Yes, LH expanded both gross and operating margins in FY2025. Gross margin improved to 28.8% from 27.9%, and operating margin expanded to 9.9% from 8.4%, reflecting cost discipline and operating leverage as revenue grew faster than expenses.
Key financial risks include a 65% drop in cash to $532.3M due to aggressive buybacks and investing activities, a debt-to-equity ratio of 1.13x with $5.08B in long-term debt, and a relatively thin net margin of 6.3% that leaves limited buffer against cost pressures or reimbursement rate changes.
LH returned approximately $690.7M to shareholders in FY2025, consisting of $450M in share buybacks (up 79.9% from $250.1M in the prior year) and $240.7M in dividends. This significant increase in buybacks reflects management's confidence in the company's cash generation capacity.