By Mackenzie Tatananni

Labcorp's "technology-first" transformation is paying off at scale, as the diagnostics giant posted a beat-and-raise first quarter.

Most Americans are likely familiar with the name. Labcorp is responsible for much of the behind-the-scenes healthcare work, as the operator of one of the largest clinical networks in the world.

The company estimates that its conducts 750 million diagnostic tests a year in the U.S. and Canada alone. In 2023, it supported the overwhelming majority of new drugs approved by the Food and Drug Administration. Earnings were the latest show of its might.

For the first quarter, Labcorp posted adjusted earnings of $4.25 a share, topping analysts' calls for $4.12 a share. Revenue climbed nearly 6% to $3.54 billion, beating the $3.51 billion Wall Street had anticipated.

The company also broadly raised its guidance. Labcorp now sees adjusted earnings of $17.70 to $18.35 a share for the full year, up from $17.55 to $18.25 a share previously. The company also is targeting between 5% and 6.1% revenue growth, representing a 20-basis-point increase at the midpoint of the range provided in February.

"I'd say we're off to a strong start for the year," CEO Adam Schechter told Barron's in an interview ahead of the report. "We have significant momentum across both our diagnostics and lab services businesses."

Schechter joined Labcorp from Merck in 2019, just months before Covid was declared a nationwide outbreak. "It was an interesting time to come over and lead a diagnostic organization through a massive pandemic," he said.

After the pandemic wound down, Labcorp pivoted to complex science. The company launched a liquid biopsy for cancer and blood-based tests for Alzheimer's disease. In 2023, the company spun off its clinical development business, formerly known as Covance, to create two publicly traded entities and hone its focus on laboratory services.

Diagnostic testing in the U.S. and Canada comprises roughly 70% of Labcorp's business today, while the remainder is tied to testing for pharmaceutical and biotechnology companies.

In diagnostics, "what's really happened is a massive amount of new science is available, and that's enabling us to develop new tests to meet unmet needs in a very different way than in the past," Schechter said.

Then there was the rise of artificial intelligence, which moved from a novel concept to an industry standard seemingly overnight. Labcorp, for its part, works with big names like Amazon Web Services to use AI in research and streamline laboratory operations.

Schechter suggests this shift is more than just a defensive move to stay relevant in a trend-driven market. "We changed our mindset to a technology-first approach," he said.

In addition to its work in AI, the company oversees a significant robotics effort. Labcorp learned partly from Covid, when the company was conducting tens of thousands of tests a day at the height of the pandemic.

Robotics have been a staple of the company's operations for over a decade; its Propel system, for instance, has been used in facilities since 2013. Earlier this year, Labcorp unveiled a partnership with Roche to bring fully automated mass spectrometry to clinical labs in the U.S.

"Whether the technology is robotics, artificial intelligence, even mass computation, we're trying to use technology in everything that we do," Schechter said.

Still, challenges remain. While the stock rallied in February, reaching highs near $289, it has since retraced those gains. Heading into Wednesday, shares were lagging behind the broader market, up 2.5% in 2026 against a 4.2% gain for the S&P 500.

Shares are still recovering from a narrow fourth-quarter earnings miss, compounded by broader risk-off sentiment across the healthcare sector. And while adjusted operating margins rose to 14.4% in the latest quarter from 14% last year, some investors may be holding out for a more aggressive improvement in profitability.

Still, the company remains a titan in diagnostics, and its foothold in the market is solid. "We're delivering on what we said we're going to do, " Schechter told Barron's. "I feel good about the path that we're on."

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 30, 2026 07:00 ET (11:00 GMT)

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