Executive Summary
Quest Diagnostics reported a solid QQ3 2024 with revenue of $2.488 billion, up 8.4% year over year and 3.8% quarter over quarter. Gross profit was $811 million, yielding a gross margin of approximately 32.6%, while EBITDA reached about $479 million and operating income was $330 million, translating to an operating margin of 13.3% and a net income of $226 million (net margin ~9.1%). The quarter benefited from healthy testing volumes and mix, but profitability was moderated by ongoing acquisition activity and related amortization and integration costs. The company generated free cash flow of $250 million and ended the period with $764 million in cash, while net debt stood at roughly $6.21 billion, reflecting a deliberate capital allocation strategy that included significant acquisitions (acquisitions net outflow of about $1.53 billion) and debt financing. Management commentary (not embedded in the provided transcript) typically emphasizes core diagnostic testing demand, streamlining operations, and disciplined capital allocation; investors should monitor organic growth, margin trajectory, integration of acquisitions, and the balance sheet as key drivers of medium-term value.
Key Performance Indicators
Key Insights
Revenue: $2.488B in Q3 2024, YoY +8.41%, QoQ +3.80%
Gross Profit: $811.0M, Gross Margin ~32.60% (YoY +7.56%, QoQ +0.87%)
Operating Income: $330.0M, Operating Margin ~13.26%; QoQ decrease of ~7.04%
EBITDA: $479.0M, EBITDA Margin ~19.25%
Net Income: $226.0M, Net Margin ~9.04%
EPS: $2.01 (diluted $1.99); Weighted avg shares ~112–113M
Cash Flow: Operating cash flow $356.0M; Free cash flow $250.0M; Net cash provided by operating activities $356M; Net cash provided by financing activities $1,7...
Financial Highlights
Revenue: $2.488B in Q3 2024, YoY +8.41%, QoQ +3.80%
Gross Profit: $811.0M, Gross Margin ~32.60% (YoY +7.56%, QoQ +0.87%)
Operating Income: $330.0M, Operating Margin ~13.26%; QoQ decrease of ~7.04%
EBITDA: $479.0M, EBITDA Margin ~19.25%
Net Income: $226.0M, Net Margin ~9.04%
EPS: $2.01 (diluted $1.99); Weighted avg shares ~112–113M
Cash Flow: Operating cash flow $356.0M; Free cash flow $250.0M; Net cash provided by operating activities $356M; Net cash provided by financing activities $1,770M; Net cash used in investing activities $-1,633M; Net change in cash $493M; Ending cash $764M
Balance Sheet: Total assets ~$16.095B; Total liabilities ~$9.174B; Total stockholders’ equity ~$6.809B; Cash $764M; Total debt $6.97B; Net debt ~$6.206B; Goodwill $8.605B; Intangible assets $1.716B; Goodwill & intangibles $10.321B
Liquidity & Solvency: Current ratio 1.254, Quick ratio 1.166, Cash ratio 0.365; Interest coverage ~6.07x; Debt-to-capitalization ~0.486; Long-term debt-to-capitalization ~0.453; Debt to equity ~0.944
Efficiency: DSO ~49.8 days, DIO ~9.72 days, DPO ~69.35 days; CCC ~ -9.86 days; Inventory turnover ~9.26, Receivables turnover ~1.81; Asset turnover ~0.155; Free cash flow per share ~$2.23; Operating cash flow per share ~$3.18; Cash per share ~$6.82; Dividend payout ratio ~37.3%; Dividend yield ~0.48%; Price/Book ~2.56; Price/Sales ~7.00; P/E ~19.35; EV/FCF ~69.68; Enterprise value multiple ~66.52
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.49B |
8.41% |
3.80% |
| Gross Profit |
811.00M |
7.56% |
0.87% |
| Operating Income |
330.00M |
-3.51% |
-7.04% |
| Net Income |
226.00M |
0.44% |
-1.31% |
| EPS |
2.01 |
1.01% |
-1.95% |
Key Financial Ratios
operatingProfitMargin
14.1%
operatingCashFlowPerShare
$3.18
freeCashFlowPerShare
$2.23
dividendPayoutRatio
37.3%
Management Commentary
Transcript highlights unavailable in the provided dataset. No earnings call quotes were supplied. When available, management themes would typically cover strategy execution, operational efficiency, payer/reimbursement dynamics, and market conditions driving demand for diagnostic testing.
Forward Guidance
No explicit forward-looking targets or guidance were included in the provided data. Given the quarterly results, investors should based views on ongoing testing demand, potential margin pressure from integration and amortization of acquisitions, and the company’s ability to deleverage over time. Monitoring points include organic revenue growth, cadence of acquisitions and their integration costs, cash conversion, and the durability of operating margins amid payer dynamics.