Quest Diagnostics (DGX) 1 Feb 242023 Q4 Earnings call transcript

Welcome to the Quest Diagnostics Fourth Quarter and Full Year 2023 Conference Call. At the request of the company, this call is being recorded. The entire contents of the call, including the presentation and question-and-answer session that will follow are the copyrighted property of Quest Diagnostics with all rights reserved. Any redistribution, retransmission or rebroadcast of this call in any form without the written consent of Quest Diagnostics is strictly prohibited. I'd now like to introduce Shawn Bevec, Vice President of Investor Relations for Quest Diagnostics. sir. ahead, go Please

Jim Sam Chairman, Officer. Samad, by and Executive President; and our Davis, joined Chief our Officer I'm Chief Financial

this release. a future Risks make most non-GAAP results may those and annual in include, Form those the to are call, projected. current and our measures Quest may During uncertainties discuss that XX-K to, earnings differ our may reports to not will quarterly Form Form from press described on comparable forward-looking GAAP measures. Diagnostics' results in of reconciliation statements filed reports provide tables non-GAAP Actual measures We we recent affect report limited on subsequently XX-Q but and X-K. on materially and

EPS references EPS reported adjusted reported For refer to references refer to EPS. EPS this and diluted to diluted adjusted to call,

Any to base and growth testing. long-term growth refer compound growth, total growth revenues the excluding annual adjusted are or rates revenue performance outlook associated references volumes COVID-XX business revenue growth business our acquisitions, organic with including Growth our to earnings testing, projections, from rates. of revenue

Finally, revenue measured will acquisitions base our growth from against rates business. be

Jim is Davis. here Now

and Thanks, morning, good Shawn, everyone.

drive our channels to year base customer in business profitability. strategy made line our our year business as from of revenue delivered we in progress and our The results for earnings reflect a fourth on X% testing. COVID full morning improve base quarter full strong we this the strong and For which we growth and our XXXX, on substantial away core delivered growth commitment top transitioned announced across we

systems a expanded with innovative relationships robust growth pipeline Throughout the with solutions, testing strategy M&A. year, new we of our and and health advanced

revenue clinical hereditary advanced growth double-digit prenatal neurology. areas, delivered and including several also We genetics and cardiometabolic, in

investment growth, also higher strengthened residual with testing. oncology in minimal disease a strategic our offering We

we issued and the for addition, tailwinds the cost guidance to earnings the revenue we return balancing goal morning, our reflects and that faced year. headwinds helped throughout we the improve XXXX efforts to Invigorate headwinds delivered a In us This our overall productivity while year. quality which offset growth for see

are growth. Quest our long-term mid-single-digit earnings world, day, at to to Looking financial I'm our beyond single-digit revenue create positioned purpose outlook making to drive grateful they and healthier growth this high happen. life a to dedicated XXXX, we working to our colleagues bring life one a time. Every together deliver well

regulatory discussing Before from to updates. XXXX, highlights share recent I'd like some

place Medicare and scheduled First, next as were you delayed know, PAMA data that again to once in take the reimbursement cuts process XXXX. under Congress collection

continue through pleased we with with the to delay, passage permanent ACLA's While highest fix a trade the to SALSA, to we SALSA. of are our year Laboratory to PAMA Services secure Act. access to association priority this saving work is closely seek

quarter nearly and are laboratory and as X,XXX regulate Second, known legislation Lab-developed last ACLA CLIA. that comments highly federal groups innovations medical a other developed tests rule submitted as the on tests proposed by essential individuals under medical to are regulated already devices. FDA

determinations. ACLA not agree coverage states, unnecessary add is to innovation legislative discussions resuming and to have authority rule regulate care compromise that access a Medicare diagnostic FDA's would on the solution other oversight that costs. also FDA health prudent testing. accredited with most path forward. with the We unilaterally and would LDTs believe lab patient does the ACLA Congress, and the addition and to makes central it stakeholders statutory FDA, enacted, If In bodies by It the the slow as proposed a

guidance our financial for about results strategy will financial Now discuss detail I'll recap quarter. our talk our highlights from provide more XXXX. the Sam and fourth Then and on

customer and consumers. channels is the through needs customers. molecular across our evolving meet on of with areas, and clinical focus physicians, that enable growth including oncology. our drive core diagnostics focused genomics on to advanced solutions an hospitals intense strategy growth Our faster-growing delivering We

key with are on In labs. growth hospital accretive driver independent a an addition, well outreach emphasis acquisitions as purchases smaller as

across and workforce driving experience strategic Our AI business deployment operational quality, strategy of efficiency, automation improve the improvements to and with also includes service.

some updates areas Here on progress we are in the quarter. fourth made have the in these

growth delivered In scale by overall to gains business Physician of our to competitive mid-single-digit attribute Lab return Services, driven and revenue offerings. we growth. care, the We base this strengths growth share market innovative and

for [ lab definitive acquisitions, Lenco transaction We a physician execute entered outreach to quarter. select laboratory this hospital January, New assets to an independent company continue to of expect ], volume In and York-based channel. our which independent the into later and generate agreement we acquire complete

our In and acquired deepen addition, we will Pennsylvania in Steward patients reach which Health Massachusetts, of Care, Ohio. to outreach assets

earlier, we expect acquisition strong, very As said XXXX. complete is transactions our and pipeline additional we to in

digits growth Our of driver health by strong single relationships were we with XXXX a versus grew year. prior plans plans the in key high revenues as from health also and

we plan revenues clinical for than value members. come of completed we plan health health economic renewals that health faster to As value-based half them and XXXX. now scheduled employer self-insured traditional compared health from we've our deliver enable their contracts. negotiations recognize To more our to successfully growth clients all indicated, contracts, the and date, which were and strategic We in plan plans

to the health we redirecting with by lab so-called continue Quest. labs, to reduce leakage volume out-of-network partly plans, working high-cost addition, to In

Importantly, patients of for costs. majority this well care employers, is pay the as health both good for which as

them to laboratory and pressures can quality, to management They help to them grew testing, well testing collaborative lab growth services, with reach solutions out more also lab strength revenue than Increasingly, health systems laboratory in improve our the us affordability for our faster prompting lab recognize estimated care. In above high help both face professional in business in fourth drove single-digit growth the particular, productivity, trends hospital market. reference and cost with quarter and base much and and that innovative their we labor hospital historical to services. reference of continue strategy.

chain manage supply lab, help professional and hospital's Our workforce. services lab a

We patient time. right our from solutions insights the to manage hospitals analytical utilization the to deliver help to at also the right test provide right

PLS fourth the completed growth will first year. quarter quarter, the two of relationships contribute this In in modest we that

We to the outreach laboratory patient have to their also provide these acquisitions. areas outreach that hospitals are on capital through Quest, of assets transition their By able noncore impact redeploy selling to assets opportunity to care. their health systems business scarce us a greater better to

million service, questhealth.com, in [ of consumer-initiated $XX with full Our testing base the business ] strong revenues XXXX, year generated approximately growth.

fourth ad and on customer costs quarter. spend return remained in the favorable Our acquisition

XXXX, more than strategy channel. revenue generated $XX drive our CIT to partners. through this growth million Another element of is In through channel we

product We testing new chemicals are excited forever including in about blood via questhealth.com. also XXXX, or releases for PFAS

food levels, exposure of may increase may testing that care and chemicals eye CDC Society, U.S. have accounted have kidney a for chemicals approximately in elevated PFAS PFAS and cholesterol PFAS for costs conditions. been in which January, the may consumer and in billion the products health cancer, the late for new In water. $XX industrial risk individuals issued of and guidelines Journal blood that used decades XXXX. other to contaminate Endocrine of value study recognize According in health

portfolio hereditary most the comprehensive of in prenatal we among field in was growth Growth diagnostics, tests largely and which the the genetics neurology by several Alzheimer's Advanced quarter, and of is areas experienced clinical advanced in driven including Alzheimer's neurology. fourth double-digit In fast-evolving across care. disease cardiometabolic, our

insights ] include also and our innovations on early from test [ complement [ blood to added amyloid week, our proteins genetic detect PTALXXX to Our AV based for testing. risk Apo lead [ amyloid test we ] ] assessment beta ] beta blood This AV detect [ risk. line

In lead to based addition, this additional amyloid to ]. our for We menu. and intend disease several add our biomarkers and beta, diagnosis later Apo includes on PTALXXX and test [ CSF [ ] Alzheimer's year portfolio continue tests expand monitoring

minimal are molecular launch and Oncology Excellence disease this to track on in later Texas. our In physicians Haystack year oncology, genomics from of test residual Center to we Lewisville, our

fourth We to effort support [ We Sciences. Universal MRD precancerous Foundation this test. research for with for has quarter, test Life recently collaboration Universal's Trisellis a Haystack including trial approval screening the to using help [ collaborations we Cancer announced in Rucker's clinical trials technology ] In and with Alliance gain ] innovative the this also Institute, regulatory forward believe lesions. clinical cancer, which innovative DX, blood for developed look supporting an announced colorectal can

we with expanding arthritis. access collaboration PRISM for our aiding are Cipher, the test for patient selection Through RA to rheumatoid treatment

operational excellence. to Turning

Our productivity Invigorate cost program savings annual X% delivered our improvements. and targeted

Here are how operations. we're improving of three examples

specimen in Pittsburgh productivity. quality progress front-end X which additional using enhance front-end This to completed In Dallas automation in First, our automation XXXX, and to add improve sites. will upgrades laboratories we processing. we we'll and year, make continue

AI areas. the possible of in digital efficiency AI slides. help patient bacteria identify of use that the cultures as as workforce expanded several patterns also XXXX, to of use quickly cytogenetics we experience disease to and in clinical expanded quality, identify chromosomal microbiology we improve to well In signify identify in and images abnormalities. and AI Second, can

parasitology. several forward, Looking in areas are pathology AI the including opportunities additional to clinical by use cytology, we encouraged and

we AI labs AI job in identify Clifton we our more Third, routines. other an that support their lab this look to in And deployed productive introducing helper daily continuously forward be to XXXX, at ways helps processes. tool and staff laboratory in

possible. thank on Sam? colleagues I'd significant like whose have XXXX. the details more Quest XXXX progress improving make our our We margins and turn provide this of efforts base to over that, performance With I'll it Sam we made our helped Finally, business personally in to our to guidance.

were billion. prior X.X% the to revenue X.X% fourth quarter, business Base In the versus $X.XX grew revenues down $X.XX consolidated billion, year.

fourth services revenues to XXXX, COVID-XX for declined year, growth testing Information and COVID-XX by declined million. Diagnostic the our to testing testing $XX base revenue. lower strong compared offset prior of in from reflecting versus revenue Services X% While approximately partially XX% the quarter Revenues

compared X.X% versus prior million Unit the up revenues by versus and Total $XXX operating Total On requisitions, or XX expectations. was points business XXXX, our X.X%. of positive X.X% acquisitions testing volumes an income $XXX million X.X% to per adjusted year. $XXX by million million of was volume, year to last primarily XX.X% XX.X% Base Revenue basis, or Reported volume. year. in per year. XX.X% revenues rec fourth driven with total operating quarter contributing or revenues revenues of of of COVID-XX lower consistent number basis requisition was X.X% quarter versus fourth was revenue the reimbursement to measured or income compared base prior the molecular declined grew increased last the with $XXX the of price volume.

to year-over-year taken and wage revenues, testing in compensation, increases, in increase quarter in the base XXXX growth in billion related to $X.XX from partially a costs care lower primarily prior reduce lower employee $X.XX and the higher compared support to versus $X.XX to adjusted ago. COVID-XX deferred income The full year, driven lower performance-based primarily costs COVID-XX is revenue. business, by operating for actions compensation was EPS offset year last compared higher year. Cash billion the expense. operations $X.XX Reported by was year $X.XX EPS Adjusted $X.XX was health in testing XXXX

of a The Board with Directors quarterly the since $X.XX annually in from $X effective per annually dividend its XXXX. our April authorized XXXX. share raised share Finally, dividend has to $X.XX increase company X.X% has per dividend our or in payable

range capital EPS to be to $X.XX. approximately guidance. approximately EPS to adjusted is Revenues million. in be $X.XX billion. and are $X.XX billion of $X.X expected range a expected expenditures be to operations Reported $X.XX to Turning expected full a to be to $XXX and to in is year Cash XXXX our between are and expected $X.XX and $X.XX be of billion from

our the posted of of Which the page on we We Investor that today. bridge EPS to EPS a guidance the adjusted bridge. XXXX shared shows key website an Relations from have earnings our adjusted some adjusted elements XXXX includes to presentation

Our reflects following XXXX the guidance consideration.

COVID providing and longer guidance. revenue detailed are no We base business

million XXXX of we note least that COVID offset base first growth However, in COVID in during covered we decline are of business. partially revenues XXXX, at $XXX quarter occur will as last year. headwind $XXX assuming the expect generated QX revenue will Most the in we the which the million that from

well our that acquisitions Lenco announced as contemplates lab mentioned from including of only [ earlier. to closed independent NewYork-Presbyterian as acquisitions guidance been Jay M&A, Healthcare, the or and date, the ], terms outreach In have Stewart

$X.XX acquisition Oncology approximately full in XXXX. of from an We impact dilution with our year EPS of the will absorb increment Haystack to adjusted of

issuance roughly expect in and made end XXXX. operating progress We result our expense margin increase XXXX improving business in strong a in to base of a We to debt flat XXXX. net interest compared assume We in XXXX approximately borrowings as our the expansion November. margins share higher $XXX to following of anticipate million count

our is to in of full slightly in We XX% experienced the year disruption are seasonality typical weather This of reflects QX January. below be the amount and earnings. EPS we've significant roughly adjusted expecting

of we turn financial point, finally, revenue outlook we in anticipate $X.XX it our long-term growth well this are At as a Jim And high that, QX. mentioned $X.XX back to growth. and deliver weather now positioned single-digit mid-single-digit earnings Jim. drive I'll headwind earlier, to to With to

are today invented leadership. recognized like for who company a his Metcal is from as remember of providing was passed Paul in Thanks, founded services Brown health moment take and vision industry quality we this basic City. Brown, his that to blueprint XXXX, pioneer who ] to Dr. and a Sam. to January Brown apartment our New year. In predecessor I'd the essential York grateful away Dr. the Diagnostics, for care, Quest lab Dr. in A. [ of

delivered business XXXX and base our growth revenue commitments. summarize, in EPS To strong we achieved

a to tailwinds headwinds Our guidance the total we revenue and while in XXXX year. reflects return balancing for growth the earnings see

Looking deliver who earnings single-digit at high bring our to day, growth. financial our world grateful And healthier beyond we create life growth our one to a to to quest positioned drive time. life revenue XXXX, purpose dedicated mid-single-digit outlook single to and together colleagues working long-term every well I'm a are

Now happy we'd to Operator? questions. your be take

Thank you.

from and of now limit Donnelly, At today that the [Operator of will ask up We company, our it to to will first Citi. please come questions. Patrick we one question. open question request Instructions] yourself you the

outcome for Sam, of little then kind headwind any And including holding outlook budget, you push the And with the the lit function potential PAMA, that 'XX. a on that just getting just margin those with PAMA alleviated front the off green on you one margin obviously, of just Can of you you bit expand out. got it's for the clarity by maybe the on pushed but there? there for means, not expectations were Probably got the then were more on there, you as windfall you cadence until investments any a being guys on more some plan out, as year. just

bit thought that more margins. how on piece about Just you wondering a color expense there and

Yes. Patrick. Thank you,

offsetting So in saw the lot listen, great XXXX headwind of of that we progress margins we COVID 'XX. made a in terms in our expanding and

that's going we're to any in offsetting We're work assuming in on volume to expectations, are to margins. In terms of looking in prepared margins, again, 'XX. expand biggest With, at the great of on margins looking be that the the 'XX inflation the plan, line as key labor growth, going continue driving with the mentioned doing that be we expectation headwinds terms of impact to continuing and remarks, Invigorate cost saw the expand we're we have of volume in to we growth in drivers to that we're going be to what be XXXX. the

that . expecting necessarily get it not necessarily it to to in X% somewhere expecting better worse, get but to X% either. not So range, growth

your you're terms PAMA, not a absolutely In of negative. Patrick, It's on It's right. the positive. absence a question of

potentially a to key investments. us we referenced. that the you're impact. expand certainty had difficult We 'XX So potentially to Jim, some operating that back see the essentially, offset investments punchline had to had occurred delay or right affords I going some think that fact we're we defer have XXXX now for is certain and had make And difficult some a... not gives make for to would XXXX, of sense us to to you that avoid margins. PAMA PAMA decline. to wanted in those come have in the that And cuts would we But the to ability now make I of that continue the have delay certain cuts

Yes.

important standpoint. we in There's later bring you complete this blood-based going investments still a year. that Patrick, in tests. continue heard from So our prepared our portfolio will Alzheimer's one our me and our blood-based that up in We're testing of remarks. Alzheimer's will invest biomarker discuss to to

that that me first PFAS You that We're here testing. the up. mention be We'll heard quarter. in bringing test launching

And have gotten systems consumer some couple of upgrading bring we're physician finally, demand up. of labs. esoteric in a to then and significant information our We that laboratory test our

ability And so to gives of the continue those the cut lack us investments. to this PAMA make

comes The next ISI. question from Elizabeth . with Anderson Evercore

of have didn't that you're making the incremental side? ended you higher I end of combo Haystack? of pushout, of a of sort that on the sort I progress about accelerating Is sort sort know X-part unrelated on have because dilution. test can of progress one. One, up you're talk you sort on seen the

can about updated secondarily, that to not your your year? capital just share then thoughts assumptions, repo guidance that's your thoughts you I wanted hear remind on us And deployment. base but know the on current for in for

Okay.

Let take me will Sam Haystack, address the progress question. the on second

we There's half $X.XX versus last then $X.XX is Haystack thought. to So $X.XX investment this And as no year, what year. the we said year. We proceeding for to incremental likewise, $X.XX incremental expected.

are the our remarks, my in Center We of Texas Excellence. of heard proceeding three as Lewisville, in we It's discussions clinical announced up We trials. bringing -- prepared you assay Cancer expected.

it doing purposes. are the the we launched year as we're paid continue that the we to right for here in moment. getting for assay. we half validate testing expect testing Obviously, not But commercial first this to So of have

Yes. second Elizabeth. take And question, the I'll

repo, million in our we it repo to share So and was so we that in It dilution in first $X.XX range where $XXX the what to QX. called $X.XX $X.XX. with share in With of that's XXXX to all, of line in, expectations. regards Haystack had came just of was be clear, to did $X.XX. That's

'XX 'XX, expectations sorry, similar to are dilution work QX. QX. And dilution equity range our in -- in we to the offset did 'XX. are offset would Our to I said basically it's And that current equity in out something expectations in in that

$XXX That's around offset the equity dilution. to assumption, . somewhere million million. $XXX base So is to which

question Next Bank. come will Chickering from of Deutsche Pito

you There in the help a XQ margins, amount. at street are bridge what operating XXXX dilution, moving for then XXXX? bridge Can by in lot pieces are to versus we missed margins us a margins And to excluding If look margins of XXXX XXXX? a you XQ guiding provided. decent how the Haystack you're operating

take Sure. Pito. Why don't I that,

implied growth operating calling of we margin specifically not of operating We're dollars what's implied there's terms in the in expansion definitely where guide is 'XX operating but we all, of out operating first at in midpoint And the margin margins. that's the that margin of in for XXXX, gave. terms So the 'XX margin guide in what and rate the what's operating came versus in. rate.

margin With regards in around bridge really rate then QX to you in perspective. We how into listen, that us there the QX an and things operating were moving from three XXXX, parts It impacted that at XX.X%. came despite year-over-year, care still was But significant Number in yes, terms missed in costs. significant we in reasons. year-over-year of growth for one was growth drop employee operating terms expectations, key health three revenues. of a margin versus COVID

regards expected So X/X X/X, that care we the talk bit little They miss. would in health X/X. what 'XX in I about than in cost by came to can of that. was so But equally, basically, these X/X, three doing with we're reasons, weigh QX, a and higher way, employee

made we made related and that towards in IT. the of costs namely to made labor that but additional year not targeted some that higher end costs, QX, some investments we investments necessarily -- investments we the Additional some

a was in well. which of third miss X/X expense, was that compensation as came So higher. deferred And then the

again margin versus impacted of remember, operating expense miss tune that gets EPS margins expectations. Now impact but X/X that the not nonoperating on an That's to an our our of offset that's line. that the impact.

of frozen factored the lower X in employee because part The back as health by we've care. years, Now frozen if years, care costs even XXXX 'XX. in now significant last pass towards we're over care to the had had, you've for employee you contribution health employees that the cost few seen our to that care them to we employee the mean, costs, we on -- that having last our with plans. We've health look into of health terms guide. And inflation I taken mean, I steps also said, I of employee some

XXXX. So that's assumed already in

mentioned tailwind offset EPS. really deferred to gets that's that's As going what's margins. I help 'XX, budget the neutral I there's a also We just in us line shows The Patrick, nonoperating up as that growth to don't it is just and grow headwind a noise. assumed if on compensation, for in volume that. or

investments said, we made I XXXX, in as guide some any QX business in make then in the factored for additional 'XX. position And of additional terms into that's to investments we and the that

terms feel our of we margins -- So operating next confident this about in year. growth

me let just to Peter, progress the just made about QX we year-over-year. go talk Yes. to back

Sam as COVID was at at that revenue indicated, So 'XX are the $XX $XXX were of mix year-over-year. million look was million. And down down in $XXX that paid our And getting we versus revenue, remember, point. QX if you

Our business of that, the we $XX $XXX is still that, which margin offset down points. were by mix Despite lower operating we XX why our bad improved million basis revenue, million. and base

as progress march made quarter that we into we the significant XXXX. progress in will So and continue

from comes question Research. of Nephron Meehan Jack next The

the I of Do utilization think in like terms areas? in are elevated what Good hoping pandemic. of guide? are Jim, any terms of last you was years morning. you in Thank seeing coming You've from you. you that out to sustain? you, the Or the can of rates hear had couple moderation core assuming

Yes.

X.X%. for we volume growth fourth of Jack, So the quarter, saw

growth the had year, we volume total X.X%. of For

and weeks year. the to the growth for last that volume X rates so, normal the saw portion year, bit. Now recover or have U.S., volume first we across X very with week seen weather I in the stunted was would this you at a tell we've the beginning that the the of to expectations But we

was because know in costs, utilization plans health So care of We, of ourselves, our you've several heard utilization quarter. higher of own reported there employees. have we higher fourth health our own the the

weather. at albeit month year it been bit to expect the by first normal above we the has market So continue little a slightly of the rates, tempered

The next from come Tanquilut will of question Jefferies. Brian

Maybe, have and think to is to back how that revenue us tests guys tailwinds here, all with new or is the Help outlook the getting bridge right? all you comments these Sam, provided? outlook earnings looks whatnot. that Jim how as long-term comfortable it potentially EPS long-term good, 'XX forward in 'XX the from I aberration. about on obviously, like You an there one-timers growth in earnings Because growth, you've but Are some do that going forward? going

Yes. Thanks, Brian.

definitively let absolutely mid-single are the So our revenues of is which EPS the to all, we that long-term still first growth me we say grow in single digits grow essentially that high confident in about digits. to gave, guide

growth unchanged. So is long-term

are transient headwinds or that yourself temporary mentioned, year. there As XXXX think see are this some that in you we I

So we've year-over-year. approximately $X.XX got a COVID revenue decline, $XXX which or is roughly million

really to is a the dilution which tune and dilution, this got borrowing as now saw Haystack full dilution interest that the got by and you've year in is then costs we driven on debt environment but a half a before, took we're additional $X.XX the And of called which of got expense, we've You've macro that is versus that we the higher result 'XX. you've in. which -- year about

feel to basically in confident And really made November in 'XX, the not landscape to are Haystack and pay the us. acquisitions the the included fund to issuance M&A guide. acquisitions, in the we some strong the about opportunities also business. and some we really partly to acquisitions we ahead which to fund of that's but and for of this NewYork-Presbyterian, business extent, a growth upsized the that in future base We've M&A as in fund pipeline, well and got But

So about I growth we we're of would and guide is that the definitely the still EPS confident say the gave. business punchline the long-term

of from comes question Kevin next The Caliendo UBS.

better. next that for like yet margins Alfonso the assumption year. I guess But Is when I I M&A the into I'm expansion about you isolate another some just Andrea in expect around of of my and is, takes far? mildly or I'm absorbed of you've or the to think below puts in about there's we the enviable question thinking that accretive Kevin. It's I asking the Unfortunately, gets maybe margin guess around want in question maybe and expectations. there line margin. what so just sort know position

of there understanding of was of reductions, Is items. a I -- in sort Some et tranche? think of around some those just charges GAAP workforce Just trying or from your new on one that an is lingering get two slides, mention on cetera. that your to XXXX

Yes.

to thank earlier, really met big 'XX, any actions So slightly it's as be our And going key And reductions, right aren't mean expansion, I in question. factor. that's base. across we we for exceeded to workforce With see that -- going in target workforce be planned any continuing growth to reduction with cost margin going With regards in there to actually is 'XX, the entire you we to volume initiatives. regards mentioned a X% of tune that cost the by I now. reductions That's factor to those We're to continue driven about we the XXXX. invigorate that have talked it.

-- have you count just head a that's to to there But have placeholder when at workforce look Usually, non-GAAP, we gap specifically anything we potential when cuts. reductions any related for that restructuring there potential isn't or charges.

reductions in continue cost that the to have do 'XX we we Now see.

be disciplined then some Yes, but margin terms QX, our from to we our in we'll QX So as growth. of go see benefit the so last we in forward continue in we driver have very 'XX. for cost some of key about P&L didn't in year, that reductions really instance, that's

Gill JPMorgan. The from of question next will come Lisa

button mute check on please Gil, the phone. Ms. your

volume this curious You on just side. talked growth I'm the a morning, lot price about but

So stabilizing quarters, with plans. back last to the if you about couple I talked of pricing go health

leakage and opportunity health about there. plan the talked You earlier

for pieces that So together maybe much of and price is the put for those volume on as us of side? we the about can growth you how year think is X much next how

Yes.

just we'll recap then 'XX 'XX. So into let get me and

provided X.X% price test contributor reported a okay? a per So in positive price, that. req slight was we've that So per price up XXXX, us base was our rev and price, lift year-over-year, pure towards

again, to year. XX% concluded Obviously, slightly health Now But to in all to expect, for year. we up slightly We enter XXXX, tranche going into that the there's prices that up X/X we new to will XX% as flat renew always feel about be remain every XXXX. plan -- 'XX. we a price flat renegotiations the confident comes of significant

Bruin The De next from question Derik of of America. Bank will come

LDT the -- Look, it little. It's process legislation bunch would can LDTs your qualify of exposure what sort tests introducing your like you're for mean, like progress a I than track changing So is that. you looks a has. of new thought more to quantify here? making and it's

do from how through? There's to goes on do And if market. not operate look on sort landscape get think been some that? changed would And Haystack as there? space. sued. been then there's Haystack does how players and that's the at So think on the movement And to other your and have what's you to of happened a test follow-up, litigation being freedom portfolio has about in you incremental as you IP IP able that the about investments some discontinue blocked legal lately that MRD you

Yes.

So second question me address let your first.

the underlying out there. John solid it. no Much risk with University, We IP that the about Hopkins respect feel on that and we're using Haystack. of have confident We comes to of IP we're very in technology

So no risk.

final in pharmaceutical industry today, in decisions four those the said work to on diagnostics, rule XX% do industry, laboratories. wait would of tell FDA the a I and Both and April we've our you're of doing require considered amount work be regulation. FDA there. us you we'll companion we past make the about is from significant tests LDTs. certified amount a already of the is, we and work international pharmaceutical then think for do for We'll an I LDTs, when of from significant as operating for hear to of terms under you're that especially are essentially In What industry the ISO what

to there get accredited, radical be all we don't and what for investments be be. of to it's not LDTs Quest a do we not laboratories there required our Diagnostics. will to heavy But anything that do. going So further it's that steps lift Yes, know need Will

will of William Instructions] Brackmann Andrew question next The Blair. [Operator come from

we market for think therapy this cetera? about high to category. it offerings maybe opportunity have different sort sort go of the there. at see to you a take Or Alzheimer's a sort you're like want investments monitoring of et of the about talk that you at screening you level oncology does something where I just path and for that you ultimately that kind the looking Can back making of guys? selection Should

Yes.

So thanks great question. question. a the for It's

new So have testing awareness. widespread would of are just introduced physicians. of created because just that that both that this part, and In to options there's say broader therapeutics to first, available is I has awareness now consumers been

testing conducted of majority which spinal the test. Alzheimer's testing, which via expensive today to know, is cerebral you As is $X,XXX or fluid, CSF for are expensive not $X,XXX PET lab CT, exams an

expensive cost an is the of out is of CFS However, that roughly body to the human likewise, total procedure the And $X,XXX. procedure. extract

We care assay considered blood-based Alzheimer's ] the dementia and/or blood-based involved, brought earliest up then the amyloid generally ], That, Alzheimer's. blood-based a completes markers. plaque, of genetic amongst be interest assays brought think XXX second in AB that the are and we've our [ to [ there's year. ] continue brought expect [ offering. widespread what indicator Apo have tau both long XXXX year and risk blood-based We we for testing, up is interest, brought and two that double-digit a which on that a up I we onset. for consumer bringing of indicator in all widespread in We XXXX is physicians. we protein growth E for which we CSF one this our had up assays XXX markers and beyond. double-digit earliest there's will primary also later growth one And the And essence, up call And

question next The of will Davis Barclays. from come Stephanie

little AI on more to hoping having have then the a dig that you'll these to into things guys be will And will of that just opportunity? about job guess is your remarks. you're job, little the the around was I rollout Could question investing what more and help you'll of one, So solutions a on bit AI you I maybe and bit me tell to the in AI how more a you prepared assume year investments out? margin to then that as have the it follow-up more some yield safe AI develop of helper out IT for you discussions

Yes.

analyze and we between at content minimize actually and Clifton the used Laboratory move was racks So lab, Clifton in to steps. loading is it movement labor good fairly question. workflow departments within equipment and in to it our a involved unloading of one several some -- quick reviewed that find simple the we that easy steps you tool simplification we adjust tool from respect human things or referred efforts these to The that to the like each equipment, of to really really and looked with certain equipment, AI

as this things indicated deployed high, the of But partners, More one the read growing and positive. under positives it's or take microscope. if But can but in indicated images negative the reviews those at One initial a has is what's a images quicker review a it we it actually still under doing in We already it's the makes areas. is in our microscope. is with AI generally broadly, critical Microbiology grow dish opposed you as digital -- two in digital of you we much we've by microbiology. image a system of look system dish, system the positive. to -- and because now a a call

deploying artificial pathology. intelligence in also and process of the digitizing We're

you that now you're for inevitably to should pathologist a the implementing diagnosis. with pointing read call a to, slide, look interest, digitized able they the the know, what proper under that help region of microscope. and to apply make allow process pathology you've We're once of systems read is one under generally to microscope. in monitor And So digital off of as versus the at algorithms least where pathologists out helping again, we

today's And Coldwell will call come the last of from Eric question Baird. for

a to couple actually going have I have here.

What was First, missed growth the to I guidance? M&A the revenue contribution XXXX in -- this.

in in prepared from remarks, about guide, carryover 'XX, mentioned the Lenco really, XX really the signed. what's reflects, the now basis as it care, NewYork-Presbyterian, acquisitions in we right And that we And So The the Health which [ Steward we the it's really Eric. is that's that that did have we is points it. ] acquisition

take M&A, then the bps about take So at the organic out base. midpoint X% to at get million $X.X revenue if on the you from base COVID I X.X% on you're and XX remove headwind guidance

That's Yes, that's correct.

Okay.

Second question, like. mix it hospital sounds of a reference higher testing,

You that gross impact talked does about above trends being quarter? history. being margin in long-term above hospital on in the have plan of reference kind What an

Yes.

So higher is in in in more as LDT it that drawing which carries And Eric. our gross is testing, right, routine know, hospitals. that reference general, derived In we're general, test a specimens general, taken testing, the margin. than you or not like higher are margin,

there's little involved in cost phlebotomy So very work. reference

operating tests the average than of of the are higher be Generally, margin So business. to our going hospital-based the

both a for overall than at our the did book of business, rate in that year. as well So as grow faster business total QX

mix. So it was good

question was our that today. for And final

and we All call, the forward joining thank year. right. further day. through a you, our to look great have Everyone, Well, updates everyone, for

online February by until Eastern XX, may Time of or the Callers X, XX:XX Thank will XXXX. available XXX-XXX-XXXX now for accessed www.questdiagnostics.com/investor Telephone and on disconnect. February or may at participation, you A International replay you midnight be XXXX, be at replays for callers. Time, approximately your a.m. call Eastern domestic XXX-XXX-XXXX for phone from