Diagnostic Information Services drove quarterly growth
Total net revenues increased 10.2% to $3.043B, principally driven by 10.0% organic revenue growth; Diagnostic Information Services (DIS), which represents more than 95% of consolidated revenue, increased 10.3% to $2.978B, while Diagnostic Solutions revenue rose 4.3% to $65M.
Testing volume increased, but mix reduced revenue per requisition
DIS requisition volume increased 13.1%, including approximately 9 percentage points from the Corewell Health Collaborative Lab Solutions relationship and increased testing at Fresenius Medical Care dialysis clinics. Revenue per requisition declined 2.8% because these relationships have a greater proportion of routine tests; excluding their mix effect, revenue per requisition increased approximately 3%.
Operating-margin pressure reflected compensation and volume-related costs
Operating income increased 4.6% to $459M, slower than revenue growth, as cost of services increased $198M, or 10.9%, primarily from higher compensation costs and higher supplies expense associated with testing volume. SG&A rose $43M, or 9.0%, also primarily due to higher compensation costs; operating margin declined to 15.1% from 15.9%.