Quest Diagnostics Reports Third Quarter 2023 Financial Results Updates Guidance for Full Year 2023 Third quarter revenues of $2.30 billion, down 7.7% from 2022 Third quarter reported diluted earnings per share ( EPS ) of

Quest Diagnostics Reports Third Quarter 2023 Financial Results

Updates Guidance for Full Year 2023

Third quarter revenues of $2.30 billion, down 7.7% from 2022

Third quarter reported diluted earnings per share ( EPS ) of $1.96, down 9.7% from 2022 and adjusted diluted EPS of $2.22, down 5.9% from 2022

Third quarter base business revenues of $2.27 billion, up 4.6% from 2022

Full year 2023 revenues now expected to be between $9.19 billion and $9.24 billion reported diluted EPS now expected to be between $7.61 and $7.71 and adjusted diluted EPS expected to be between $8.65 and $8.75

SECAUCUS, N.J., October 24, 2023 - Quest Diagnostics Incorporated (NYSE DGX), the world's leading provider of diagnostic information services, announced today financial results for the third quarter ended September 30, 2023.

We grew our base business revenues nearly 5% in the third quarter, largely due to strength in our physician and hospital channels," said Jim Davis, Chairman, CEO and President. "In addition, we are pleased that we have now successfully negotiated all of our strategic health plan renewals that were scheduled for this year.

Also in the third quarter, we improved the productivity of our base business both sequentially and year over year.

Mr. Davis continued Given the strength of our business and a robust pipeline of professional lab services and M A opportunities, Quest Diagnostics is well positioned for continued growth."

(a)Excludes COVID-19 testing.

(b)For further details impacting the year-over-year comparisons related to operating income, operating income as a percentage of net revenues, net income attributable to Quest Diagnostics, and diluted EPS, see note 2 of the financial tables attached below.

Updated Guidance for Full Year 2023

The company updates its Full Year 2023 guidance as follows

(a) Excludes COVID-19 testing

Note on Non-GAAP Financial Measures

As used in this press release the term "reported" refers to measures under accounting principles generally accepted in the United States ("GAAP"). The term "adjusted" refers to non-GAAP operating performance measures that exclude special items such as restructuring and integration charges, amortization expense, excess tax benefits ( ETB ) associated with stock-based compensation, costs associated with donations, contributions, and other financial support through Quest for Health Equity (our initiative with the Quest Diagnostics Foundation to reduce health disparities in underserved communities), gains and losses associated with changes in the carrying value of our strategic investments, and other items.

Non-GAAP adjusted measures are presented because management believes those measures are useful adjuncts to GAAP results. Non-GAAP adjusted measures should not be considered as an alternative to the corresponding measures determined under GAAP. Management may use these non-GAAP measures to evaluate our performance period over period and relative to competitors, to analyze the underlying trends in our business, to establish operational budgets and forecasts and for incentive compensation purposes. We believe that these non-GAAP measures are useful to investors and analysts to evaluate our performance period over period and relative to competitors, as well as to analyze the underlying trends in our business and to assess our performance. The additional tables attached below include reconciliations of non-GAAP adjusted measures to GAAP measures.

Conference Call Information

Quest Diagnostics will hold its quarterly conference call to discuss financial results beginning at 8 30 a.m. Eastern Time today. The conference call can be accessed by dialing 888-455-0391 within the U.S. and Canada, or 773-756-0467 internationally, passcode 7895081 or via live webcast on our website at www.QuestDiagnostics.com investor. We suggest participants dial in approximately 10 minutes before the call.

A replay of the call may be accessed online at www.QuestDiagnostics.com investor or, from approximately 10 30 a.m. Eastern Time on October 24, 2023 until midnight Eastern Time on November 7, 2023, by phone at 800-945-5759 for domestic callers or 203-369-3502 for international callers. Anyone listening to the call is encouraged to read our periodic reports, on file with the Securities and Exchange Commission, including the discussion of risk factors and historical results of operations and financial condition in those reports.

About Quest Diagnostics

Quest Diagnostics empowers people to take action to improve health outcomes. Derived from the world's largest database of clinical lab results, our diagnostic insights reveal new avenues to identify and treat disease, inspire healthy behaviors and improve health care management. Quest annually serves one in three adult Americans and half the physicians and hospitals in the United States, and our nearly 50,000 employees understand that, in the right hands and with the right context, our diagnostic insights can inspire actions that transform lives. www.QuestDiagnostics.com.

Forward Looking Statements

The statements in this press release 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 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.

For further information Denny Moynihan, Quest Diagnostics (Media) 973-520-2800, Shawn Bevec, Quest Diagnostics (Investors) 973-520-2900

This earnings release, including the attached financial tables, is available online in the Newsroom section at www.QuestDiagnostics.com.

ADDITIONAL TABLES FOLLOW

Quest Diagnostics Incorporated and Subsidiaries

Consolidated Statements of Operations

For the Three and Nine Months Ended September 30, 2023 and 2022

(in millions, except per share data)

Quest Diagnostics Incorporated and Subsidiaries

Consolidated Balance Sheets

September 30, 2023 and December 31, 2022

(in millions, except per share data)

Quest Diagnostics Incorporated and Subsidiaries

Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2023 and 2022

Notes to Financial Tables

1)The computation of basic and diluted earnings per common share is as follows

2)The following tables reconcile reported GAAP results to non-GAAP adjusted results

(a)For both the three and nine months ended September 30, 2023, the pre-tax impact represents costs primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business. For both the three and nine months ended September 30, 2022, the pre-tax impact represents costs primarily associated with workforce reductions, systems conversions and integration costs incurred in connection with further restructuring and integrating our business. The following table summarizes the pre-tax impact of restructuring and integration charges on our consolidated statements of operations

(b)For the three months ended September 30, 2023, the pre-tax impact primarily represents a $5 million loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions. For the nine months ended September 30, 2023, the pre-tax impact primarily represents the impairment of a corporate facility that is currently held for sale and a $5 million loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions. For the three months ended September 30, 2022, the pre-tax impact primarily represents a $10 million gain from a payroll tax credit under the Coronavirus Aid, Relief, and Economic Security Act ( CARES Act ) associated with the retention of employees and a $7 million gain associated with the decrease in the fair value of the contingent consideration accrual associated with previous acquisitions, partially offset by $5 million of costs associated with donations, contributions and other financial support through Quest for Health Equity. For the nine months ended September 30, 2022, the pre-tax impact primarily represents $9 million of costs associated with donations, contributions and other financial support through Quest for Health Equity, offset by the gain from the payroll tax credit under the CARES Act associated with the retention of employees. The following table summaries the pre-tax impact of these other items on our consolidated statements of operations

(c)For all periods presented, the pre-tax impact represents gains and losses associated with changes in the carrying value of our strategic investments. The following table summarizes the pre-tax impact of gains and losses on investments on our consolidated statements of operations

(d)For restructuring and integration charges, gains and losses on investments, other items and amortization expense, income tax impacts, where recorded, were primarily calculated using combined statutory income tax rates of 25.5% for both 2023 and 2022.

3)The outlook for adjusted diluted EPS represents management's estimates for the full year 2023 before the impact of special items. Further impacts to earnings related to special items may occur throughout 2023. Additionally, the amount of ETB is dependent upon employee stock option exercises and our stock price, which are difficult to predict. The following table reconciles our 2023 outlook for diluted EPS under GAAP to our outlook for adjusted diluted EPS

(a)Represents estimated pre-tax charges of $49 million primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business. Income tax benefits were primarily calculated using a combined statutory income tax rate of 25.5%.

(b)Represents estimated pre-tax amortization expenses of $108 million. Income tax benefits were calculated using a combined statutory income tax rate of 25.5%.

(c)Primarily represents the impairment of a corporate facility that is currently held for sale and a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions. Income tax benefits were primarily calculated using a combined statutory income tax rate of 25.5%.

(d)Represents $3 million of pre-tax losses associated with changes in the carrying value of our strategic investments. Income tax impacts were calculated using a combined statutory income tax rate of 25.5%.