Labcorp Holdings Inc.

Good day and thank you for standing by. Welcome to the Q1 2025 Labcorp Holdings Earnings Conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kristen O'Donnell, Vice President of Investor Relations. Please go ahead.

Thank you, Operator. Good morning and welcome to LabCorp's first quarter 2025 conference call. As detailed in today's press release, there will be a replay of this conference call available. With me today are Adam Schechter, Chairman and Chief Executive Officer, and Julia Wong, Executive Vice President and Chief Financial Officer. This morning in the investor relations section of our website at www.labcorp.com, we posted both our press release and investor relations presentation with additional information on our business and operations, which include a reconciliation of the non-GAAP financial measures to the most comparable GAAP financial measures, both of which are discussed during today's call. Please see the Use of Adjusted Measures section in our press release and investor relations presentation for more information regarding our use of non-GAAP financial measures. Additionally, we are making forward-looking statements. These forward-looking statements include, but are not limited to, statements with respect to the estimated 2025 guidance and the related assumptions, the projected impact of various factors on the company's businesses, operating and financial results, cash flows and or financial conditions, including global economic and market conditions, future business strategies, expected savings, benefits and synergies from the Launchpad initiative, and from acquisitions and other strategic transactions and partnerships, the completed holding company reorganization, and opportunities for future growth. Each of the forward-looking statements is subject to change based upon various factors, many of which are beyond our control. More information is included in our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q and in the company's other filings with the SEC. We have no obligation to provide any updates to these forward-looking statements, even if our expectations change. Now I'll turn the call over to Adam Schechter.

Thank you, Kristen, and good morning, everyone. We appreciate you joining us today to discuss our first quarter 2025 financial results and progress towards advancing our strategic priorities. Performance in the first quarter was solid with 5% revenue growth or 6% on a constant currency basis across the enterprise. The performance was driven by 6% growth in our diagnostics laboratories business where there was a strong rebound in volume in March after impact from weather in January and February. Our strong managed care access and our payer contracts continue to serve us well in the marketplace. Adjusting for Invitae and weather, the margin in a diagnostics business improved 50 basis points. Invitae continues to perform very well and remains on track to achieve 10% revenue growth and to be slightly accretive to earnings for the full year. Our biopharma laboratory services segment grew 3%, excluding currency. Margin for BLS was strong, improving 80 basis points, and the quarter book to bill was also strong at 1.13, with a trailing 12 month of 1.07. Adjusted earnings per share of $3.84 were up 4% year over year. It is certainly a very dynamic environment, and our team is closely evaluating the ongoing shifts in the macroeconomic and regulatory landscapes. We are pleased with the outcome of the court's decision in the challenge of the LDT rule. We believe it's in the best interest of bringing new innovative tests to patients as quickly as possible. We are also contingency planning for various tariff and regulatory scenarios. We have developed duplicative flexible supply chains, and we're in communications with our customers and suppliers. While we do anticipate some impact, our guidance range includes what we believe to be the most likely scenarios at this time. The essential nature of our work has enabled us to be successful through many different economic cycles over time. And we will continue to focus on serving the needs of our customers and driving growth, all while delivering value for shareholders as we advance our mission to improve health and to improve lives. Based upon our performance and outlook, we have reaffirmed our revenue and free cash flow guidance while increasing the midpoint of our EPS guidance by 5 cents per share, with implied growth at the midpoint of approximately 10 percent for the year. We also continue to expect margin expansion in each segment for the full year. Julia will provide more details on our results and the 2025 outlook in just a moment. We continue to execute well on our strategic priorities of being a partner of choice for health systems and regional local laboratories, by launching new tests in important high-growth therapeutic areas, and by harnessing science, innovation, and advanced technology to bring valuable services and capabilities to our customers while improving operational efficiency. In the first quarter, LabCorp became the partner of choice for several health systems and regional local labs. These partnerships enable us to accelerate growth and to expand into important geographies and therapeutic areas. In January, we announced a strategic collaboration with New Jersey-based Inspira Health to manage the operations of the health system's hospital laboratories and to serve as the primary lab for the physician network. we announced an agreement to acquire select assets of bioreference health oncology and related clinical testing services. This transaction will extend our leadership in oncology. We also completed the acquisition of select assets of North Mississippi Health Services ambulatory outreach laboratory business, and we became a referral lab for its seven hospitals and clinical laboratories. Looking ahead, we have a strong business development pipeline, and we look forward to sharing additional growth opportunities with you in the coming quarters. We also continue to incorporate the power of science, of innovation, and of advanced technology across the organization. We're focused on bringing new tests into four strategic areas, oncology, women's health, autoimmune disease, and neurology. These areas have significant unmet needs for patients and are expected to grow up to three times faster than other therapeutic areas, and they are proving to do so. Having the latest innovative tests in these areas enables us to successfully capture more volume across testing for those patients. For example, in the quarter, we introduced LabCorp Plasma Complete, a groundbreaking liquid biopsy test to aid in personalized cancer treatment decisions. This advancement significantly expands LabCorp's extensive ecology portfolio. We made significant strides bringing Invitae's genetic testing solutions to our customers by launching patient affordability and access tools, and by introducing two additional genetic risk panel tests. LabCorp On Demand launched several new consumer-initiated tests, including electrolytes, GGT, hepatitis A, and total testosterone for women. Subsequent to the quarter, we introduced HPV and STI self-collection options in LabCorp patient service centers and physician offices. These solutions helped overcome barriers to essential health screening by providing convenient private testing options. And in April, we launched our p-tau beta amyloid ratio test, a powerful new blood-based biomarker test to aid in the diagnosis of Alzheimer's disease. This first-of-its-kind immunoassay further expands our leading portfolio for Alzheimer's disease and dementia. Launching tests in these important areas will enable us to outpace the growth in the overall market over time. We're also using AI and technology to enhance our customer experience and to bring forward new operational efficiencies to improve our margins. For example, earlier this month, LabCorp received a Modern Healthcare 2025 Innovators Award for LabCorp Diagnostic Assistant, a digital solution integrated into electronic health records that supports providers with real-time access to comprehensive laboratory data, insights, and self-service capabilities. This award recognizes us as a leader in driving innovation that improves care and achieves measurable results. We also launched eClaim Assist, a next-generation digital platform that introduces smarter workflows to improve efficiencies in billing payer alignment and denials. We will continue to find operational efficiencies through technology in all aspects of our business. Lastly, we released the LabCorp corporate responsibility report, which highlights our significant progress in key areas such as reduced water withdrawal and improved fuel efficiency. We invite you to review the report on our investor relations website. In summary, our business continues to perform well, and we are making strong progress against our strategy. We believe that LabCorp will continue to be successful and will lead the way with our relentless focus on science, innovation, and advanced technology. We remain committed to providing value to our customers and our shareholders alike. With that, I'll turn the call over to Julia.