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
Revenue
Increasing
2.49B
QoQ: 3.80% | YoY: 8.41%
Gross Profit
Increasing
811.00M
32.60% margin
QoQ: 0.87% | YoY: 7.56%
Operating Income
Decreasing
330.00M
QoQ: -7.04% | YoY: -3.51%
Net Income
Increasing
226.00M
QoQ: -1.31% | YoY: 0.44%
EPS
Increasing
2.01
QoQ: -1.95% | YoY: 1.01%
Revenue Trend
Margin Analysis
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
Gross Profit Margin
Fair
31.50%
Gross profit margin is moderate, room for improvement in cost management
Operating Profit Margin
Fair
14.10%
Operating margin is moderate, room for improvement in cost management
Net Profit Margin
Fair
9.04%
Net profit margin is moderate, room for improvement in cost management
Return on Assets
Weak
1.40%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
3.30%
Return on equity suggests inefficient capital allocation
Current Ratio
Adequate
1.25
Current ratio meets minimum requirements but limited cushion