Full Press Release Details
Driving Sustainable Growth, Delivering Long-term Value
Jim Davis Chairman, CEO, and President
Investor Day 2025 Quest Diagnostics
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 estimates, projections, expectations or beliefs and which involve risks and uncertainties that could cause actual results and outcomes to be materially different. Risks and uncertainties that may affect the future results of the company include, but are not limited to, adverse results from pending or future government investigations, lawsuits or private actions, the competitive environment, the complexity of billing, reimbursement and revenue recognition for clinical laboratory testing, changes in government regulations, changing relationships with customers, payers, suppliers or strategic partners, acquisitions and other factors discussed in the company's most recently filed Annual Report on Form 10-K and in any of the company's subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including those discussed in the "Business," "Risk Factors," "Cautionary Factors that May Affect Future Results," and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of those reports.
In the following presentation, references to adjusted EPS refer to adjusted diluted EPS. Any references to operating margin(s) refer to adjusted operating income as a percentage of net revenues. Any references to free cash flow refer to cash flow from operations less capital expenditures. Adjusted EPS, operating margin and free cash flow are non-GAAP financial
measures. Please see the explanation of these non-GAAP measures, including the
comparable GAAP measure, at the end this presentation and on Investor Relations
page on our website.
3 Investor Day 2025 Quest Diagnostics
The clinical lab market is expected to remain strong driven by health trends and diagnostic innovation
We have a proven strategy to generate above average growth in key channels
We expect our investments in advanced diagnostics to deliver double-digit revenue growth across 5 key clinical areas
Our operational strategy is designed to improve quality, customer experiences, and productivity
Long-term outlook beyond 2025: 4% - 5% revenue CAGR and 7% - 9% adjusted EPS CAGR
4 Investor Day 2025 Quest Diagnostics
Why we exist Purpose The Quest Way Strategy Culture How we grow How we work
Purpose Why we exist
Working together to create a healthier world, one life at a time
Strategy How we grow
We help people make the best decisions to improve health by providing high-quality and affordable diagnostic testing insights and services using our scale and extensive reach
The 5Cs Customer first Care Collaboration Continuous improvement Curiosity
5 Investor Day 2025 Quest Diagnostics
Quest is a leading provider of diagnostic information services
50% US hospitals and physicians served annually
1/3 US adults served annually
~217M requisitions in 2024
~8K patient access sites ~5K vehicles
>90% of insured lives in the US
>80B patient data points
~1,600 patents/patents pending
Global including in Canada through LifeLabs
6 Investor Day 2025 Quest Diagnostics
Quest is well positioned in the nearly $90 billion US lab market
Physician Channel $58B 2024 Total US Lab Market $89B Hospital Channel $31B
POL 11% Quest 12% Other Independent Labs 42% Hospital Outreach 35% Physician 65% Hospital 35% Quest 6% Other Ind Labs 14% Other Hospital 80%
2%-4% CAGR 1%-3% CAGR 1%-2% CAGR
POL: physician office laboratory.
7 Investor Day 2025 Quest Diagnostics
We are well positioned for growth in Canada's lab market
2024 Total Canadian Lab Market ~$5B
Hospital/Public Health 79% Community Labs 8% LifeLabs 13% ~3% CAGR
LifeLabs British Columbia Ontario Saskatchewan 41M people
Leading provider of clinical laboratory testing in Canada
Headquartered in Toronto
5 primary labs and 350 collection centers
Strong growth opportunities in Canada
Broadening access to lab services, including advanced diagnostics
Expanding into new provinces
Increasing consumer interest
8 Investor Day 2025 Quest Diagnostics
Nearly 90% of our revenues come from physicians and hospitals
~$9.9B 2024 revenues +6.7% growth year-over-year
Other 12% Hospitals 20% Physicians 68% By Customer Channel
Patients 12% Canadian Government 2% Medicaid/Managed Medicaid 8% Medicare/Medicare Advantage 16% Commercial Health Plans 27% Client Bill 35% By Payer
13% administered by Health Plans
9 Investor Day 2025 Quest Diagnostics
Macro trends continue to shape healthcare and favor Quest
Demographic shifts-older, sicker population
Innovations in lab diagnostics
Greater adoption of AI and automation
Consumer focus on prevention and wellness
10 Investor Day 2025 Quest Diagnostics
The US population is growing older and sicker
Demographic shifts-older, sicker population
74% of adults live with excess weight or obesity 40% of children live with excess weight of obesity 52% of adults have prediabetes or type 2 diabetes 30% of teens have prediabetes 79% increase in early-onset cancers
1 in 2 people with get cancer in their lifetime 2%-12% annual increase in autoimmune diseases Triple the rate of dementia and Alzheimer's disease since 2013 Triple the rate of infant and maternal mortality despite spending the most Decline in life expectancy driven by COVID-19, suicide, and liver and heart disease
11 Investor Day 2025 Quest Diagnotics
The evolution in diagnostics is shaped by "power in the blood"
Innovations in lab diagnostics
Technological advances are enabling a transition to clinical lab testing
12 Investor Day 2025 Quest Diagnostics
Automation and AI are improving quality and productivity
Greater adoption of AI and automation
Microbiology Cytology Parasitology Pathology
13 Investor Day 2025 Quest Diagnostics
Consumers are taking charge of their healthcare
Consumer focus on prevention and wellness
54% of individuals say holistic care options involving diet, exercise, and counseling are either very or somewhat important to them
65% of individuals say it is important that they be able to monitor their health with apps, wearable devices, etc.
75% of individuals would like healthcare providers to remind them about routine testing and preventive care
2 of 3 consumers have become more concerned about their health
"We are entering a new era of medicine called bio-observability the ability to observe your own biology through technologies like wearables, continuous monitors, and direct to consumer (DTC) lab testing." - Dr. Casey Means "Good Energy"
Fountain Life Function InsideTracker
14 Investor Day 2025 Quest Diagnostics
Macro trends continue to shape healthcare and favor Quest
Demographic shifts-older, sicker population
Innovations in lab diagnostics
Greater adoption of AI and automation
Consumer focus on prevention and wellness
15 Investor Day 2025 Quest Diagnostics
Our strategy supports above market growth in key channels
Physicians Hospitals Expand in high-growth areas
4% - 5% CAGR 5% - 6% CAGR >20% CAGR
Capitalize on expanded health plan network access Extend geographic reach Become a partner of choice for large enterprise customers
Serve hospitals through scaled reference testing Provide Collaborative Lab Solutions (formerly Professional Lab Services) Expand in new geographies through outreach acquisitions
Drive growth in consumer-initiated testing Support life sciences partners with testing and services Deliver insights through data analytics
Lead in advanced diagnostics through science and innovation
Deliver a better customer experience and productivity improvements through technology
Long-term outlook beyond 2025: 4% - 5% revenue CAGR and 7% - 9% adjusted EPS CAGR