Quest Diagnostics filed its 10-Q with the SEC, and its figures are now in our data. Revenue over the twelve months to Q3 2026 was $11.84 billion, which rose 9.1% on the year before. That growth rate was down 0.7 percentage points on the rate a quarter earlier.

What stands out

Net income rose 16.5% over the year while free cash flow fell 1.3%. Reported profit and cash are moving at different speeds.

Capital spending rose 17.1%, faster than operating cash flow’s 3.5%. Less of the cash generated was left over.

Growth and profit

The trailing gross margin was 33.1%. The trailing operating margin was 14.6%, up 0.4 percentage points from a year earlier. The trailing net margin was 9.5%. Net income over the twelve months was $1.13 billion, which rose 16.5% on the year before.

Cash flow

Operating cash flow over the twelve months was $1.95 billion, up 3.5% on the year before. Capital spending was $576.0 million, or 4.9% of revenue. Free cash flow, operating cash flow less capital spending, was $1.38 billion, down 1.3% on the year before. Free cash flow was 11.6% of revenue (the free-cash-flow margin), down 1.2 percentage points from a year earlier. The average diluted share count fell 1.1% over the year.

In context

Today’s free-cash-flow margin of 11.6% is higher than 55% of the company’s own past quarterly readings, which have ranged from 5.9% to 20.0%. Today’s operating margin of 14.6% is higher than 37% of the company’s own past quarterly readings, which have ranged from 12.2% to 24.5%. Today’s twelve-month revenue growth rate of 9.1% is higher than 82% of the company’s own past quarterly readings, which have ranged from −10.3% to 46.8%.

Guidance

The company raised its Full year 2026 guidance for Net revenues: $12.06 billion to $12.11 billion. The company raised its Full year 2026 guidance for Reported diluted EPS: $10.21 to $10.31. The company raised its Full year 2026 guidance for Cash provided by operations: $1.9 billion. The company kept its Full year 2026 guidance for Capital expenditures: $550.0 million.

What it means for value

In our model, growth 5 percentage points lower would lower the value by 29.1%, and 5 percentage points higher would raise it by 37.8%. A free-cash-flow margin 1 percentage point lower would lower it by 10.1%.

What to watch

The next filing will show whether the divergence between rising net income and falling free cash flow persists. It will also reveal if capital spending continues to outpace operating cash flow growth. Finally, it will clarify if the recent deceleration in revenue growth stabilizes.