Quest Diagnostics (NYSE: DGX) Q2 2026: Revenue Jumps 10.2%, Adjusted EPS Beats by 9.5%

Quest Diagnostics (NYSE: DGX) posted second-quarter 2026 revenue of $3.04 billion, up 10.2% year over year, while adjusted EPS of $3.12 beat the $2.85 consensus estimate by 9.5%. GAAP EPS rose 15.0% to $2.84. The company also raised its full-year revenue and EPS guidance.

Q2 2026 Results

• Revenue: $3.04 billion, up 10.2% from $2.76 billion in Q2 2025, with organic revenue growth of 10.0%
• Adjusted EPS: $3.12, up 19.1% from $2.62 in Q2 2025, beating the $2.85 consensus by $0.27
• GAAP EPS: $2.84, up 15.0% from $2.47 in Q2 2025
• GAAP net income: $320 million, up 13.4% year over year; adjusted net income of $350 million, up 17.3%
• Operating cash flow: $597 million in Q2, up 9.7% year over year; capital expenditures of $138 million, up 27.0%

What Drove the Results

Adjusted EPS of $3.12 beat the $2.85 consensus by $0.27, a 9.5% positive surprise, and GAAP EPS of $2.84 also exceeded that same estimate. Revenue growth was driven almost entirely by organic sources, with requisition volume rising 13.1% year over year and organic requisition volume up 13.0%, spanning physician, hospital, and consumer channels.

Despite the revenue beat, margin compression is the key divergence in this report. GAAP operating income grew only 4.6% to $459 million against revenue growth of 10.2%, causing GAAP operating margin to contract 80 basis points to 15.1% from 15.9% a year ago. Adjusted operating income grew 7.8% to $502 million, with adjusted operating margin contracting 40 basis points to 16.5%. The press release does not itemize the specific cost lines driving the margin pressure, though revenue per requisition declined 2.8% in the quarter.

The divergence between GAAP and adjusted figures reflects the exclusion of items such as restructuring charges and amortization from the adjusted results. GAAP net income of $320 million compares to adjusted net income of $350 million, a $30 million gap.

Guidance Raised for Full Year 2026

Quest raised its full-year 2026 revenue outlook to $11.95 billion to $12.05 billion, implying growth of 8.3% to 9.2%, from a prior range of $11.78 billion to $11.90 billion. Full-year adjusted EPS guidance was lifted to $11.05 to $11.25 from a prior range of $10.63 to $10.83. Full-year GAAP EPS is now expected in the range of $9.97 to $10.17, up from the prior $9.58 to $9.78. The company expects full-year cash from operations of approximately $1.80 billion and capital expenditures of approximately $550 million.

On the operational front, the company reported double-digit revenue growth in Advanced Diagnostics, including its Quest AD-Detect blood tests for Alzheimer's disease, advanced cardiometabolic tests, and liver fibrosis testing. New York State granted approval for the Haystack MRD test, and the company became the largest reference lab to use Flatiron Health's OncoEMR Molecular Profiling Integration platform for select cancer tests.

Wall Street View

At least three analyst firms responded to the results. Barclays analyst Luke Sergott maintained an Overweight rating and raised his price target from $230 to $250. Baird analyst Eric Coldwell maintained a Neutral rating and raised his price target from $236 to $255. A separate report from GuruFocus noted that Mizuho also raised its price target to $260, though the rating and prior target were not available in the sourced data.

Investor Takeaway

Quest delivered a clear top-and-bottom-line beat with broad-based volume growth, and the raised full-year guidance reinforces confidence in demand trends across diagnostic channels. The detail investors should track into the second half is whether the 80-basis-point GAAP operating margin contraction in Q2 moderates as volume scale offsets cost pressure, or whether the decline in revenue per requisition of 2.8% continues to weigh on profitability even as volumes expand. Capital expenditures rising 27.0% year over year to $138 million, against full-year guidance of approximately $550 million, suggests ongoing investment that could limit near-term free cash flow conversion.