Quest Diagnostics Warns of PAMA, Tariff Risks

Quest Diagnostics reported strong Q2 2025 results, with revenue up 15.2% year-on-year to $2.76 billion and adjusted EPS of $2.62, both beating analyst expectations. Growth was fueled by organic demand, recent acquisitions, and increased diagnostic solutions use, especially for enterprise accounts and non-urgent surgeries. Operating and free cash flow margins improved due to automation and digital initiatives. As a result, Quest raised its full-year 2025 revenue guidance to $10.8–$10.92 billion and adjusted EPS guidance to $9.63–$9.83. Management also disclosed a potential $100 million negative impact from pending PAMA cuts and anticipated challenges from European and Chinese tariffs, though these risks are seen as manageable. Quest shares rose following the results and updated guidance, signaling market confidence.