AI Takeaway
LH (Labcorp) delivered strong Q1 FY2026 results with revenue up 5.8% YoY to $3.54B, net income surging 30.5% to $277.8M, and operating cash flow jumping 935% to $191.5M, reflecting solid operational leverage and disciplined cost management.
Revenue
$3.54B
++5.75% YoY
EPS (Basic)
$3.37
++32.68% YoY
Gross Margin
28.7%
++0.32% YoY
Operating Income
$380.8M
++16.81% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Total revenue grew 5.8% YoY to $3.54B in Q1 FY2026, up from $3.35B in the prior-year period, indicating broad-based demand across LH's laboratory and diagnostic services segments.
Source: Source: 10-Q Income Statement, Q1 FY2026
Operating income rose 16.8% YoY to $380.8M while SG&A expenses grew only 0.9% to $551.0M, demonstrating strong operating leverage as revenue growth significantly outpaced overhead cost increases. Operating margin expanded approximately 100 basis points to 10.8%.
Source: Source: 10-Q Income Statement, Q1 FY2026
Net income surged 30.5% YoY to $277.8M, with diluted EPS rising 32.9% to $3.35 from $2.52, reflecting both improved profitability and the benefit of share repurchases totaling $98.0M in the quarter (no buybacks in prior-year period).
Source: Source: 10-Q Income Statement & Cash Flow Statement, Q1 FY2026
2 more insights available
Upgrade to unlockLH carries $5.83B in long-term debt with a debt-to-equity ratio of approximately 1.18x. While manageable given strong cash flow generation, rising interest rates or a deterioration in operating performance could pressure debt servicing capacity and limit financial flexibility.
Source: Source: 10-Q Balance Sheet, Q1 FY2026
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $4.25 versus the $4.21 analyst consensus — a +1.0% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $3.54B | $3.35B | +5.75% |
Cost of Revenue | $2.52B | $2.4B | +5.29% |
Gross Profit | $1.01B | $948M | +6.94% |
Operating Income | $380.8M | $326M | +16.81% |
Net Income | $277.8M | $212.8M | +30.55% |
EPS (Basic) | $3.37 | $2.54 | +32.68% |
EPS (Diluted) | $3.35 | $2.52 | +32.94% |
SG&A Expense | $551M | $546M | +0.92% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $19.09B | $17.6B | +8.43% |
Current Assets | $4.56B | $3.79B | +20.29% |
Total Liabilities | $10.34B | $9.28B | +11.41% |
Current Liabilities | $2.64B | $2.06B | +27.92% |
Stockholders' Equity | $8.73B | $8.31B | +5.07% |
Cash & Equivalents | $981.1M | $369.4M | +165.59% |
Long-Term Debt | $5.83B | $5.57B | +4.76% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $191.5M | $18.5M | +935.14% |
Investing Cash Flow | $-322.1M | $-336M | +4.14% |
Financing Cash Flow | $580.5M | $-839.7M | +169.13% |
Dividends Paid | $61.2M | $61.6M | -0.65% |
Share Buybacks | $98M | $0 | — |
D&A | $173.3M | $166.8M | +3.90% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 28.7% | 28.3% | +0.32% |
Operating Margin | 10.8% | 9.7% | +1.02% |
Net Margin | 7.9% | — | — |
ROE | 3.2% | — | — |
ROA | 1.5% | — | — |
Current Ratio | $1.726 | — | — |
Debt to Equity | $1.185 | — | — |
Other companies in Health Care Services
LH delivered strong Q1 FY2026 results with revenue of $3.54B (+5.8% YoY), net income of $277.8M (+30.5% YoY), and diluted EPS of $3.35 (+32.9% YoY). Operating cash flow surged 935% to $191.5M, reflecting significant improvement in cash generation compared to Q1 FY2025.
LH's revenue grew 5.8% YoY to $3.54B in Q1 FY2026, up from $3.35B in Q1 FY2025. This growth was accompanied by even faster growth in operating income (+16.8%) and net income (+30.5%), indicating strong operating leverage.
The key takeaways from LH's Q1 FY2026 report are: revenue grew 5.8% to $3.54B, diluted EPS jumped 32.9% to $3.35, and operating cash flow surged from $18.5M to $191.5M. SG&A expenses grew only 0.9%, demonstrating disciplined cost control that amplified profit growth well above revenue growth.
Based on the financial data, key risks for LH include its $5.83B long-term debt load (debt-to-equity of 1.18x), rapidly rising current liabilities (+27.9% YoY), and a relatively thin net margin of ~7.9% that leaves limited buffer against cost pressures. Low ROA (1.46%) and ROE (3.18%) also suggest the company's large asset base has room to improve capital efficiency.
LH's financial health appears solid: it holds $981.1M in cash (up 165.6% YoY), maintains a current ratio of 1.73x, and generated $191.5M in operating cash flow. However, long-term debt of $5.83B and a debt-to-equity ratio of 1.18x represent meaningful leverage that investors should monitor alongside the company's ability to sustain earnings growth.