•Second quarter revenues of $2.45 billion, down 3.8% from 2021

•Second quarter reported diluted earnings per share ("EPS") of $1.96, down 60.5% from 2021; and adjusted diluted EPS of $2.36, down 25.8% from 2021

•Second quarter base business revenues of $2.10 billion, up 2.9% from 2021

•Full year 2022 reported diluted EPS now expected to be between $8.24 and $8.64; and adjusted diluted EPS expected to be between $9.55 and $9.95

SECAUCUS, N.J., July 21, 2022 - Quest Diagnostics Incorporated (NYSE: DGX), the world's leading provider of diagnostic information services, announced today financial results for the second quarter ended June 30, 2022.

"In the second quarter our base business revenues grew year over year while we increased our share of COVID-19 molecular testing thanks largely to our expanded retail relationships," said Jim Davis, CEO-elect. "Our base business performed well despite softer utilization trends which we believe impacted us and the rest of the health care industry. We also continued to ramp our investments to accelerate growth in the base business, particularly in the areas of advanced diagnostics and direct to consumer testing."

Steve Rusckowski, Chairman, CEO and President said: "We have raised our full year guidance based on our performance in the quarter and our expectations for the remainder of 2022.

"Finally, we appreciate the bipartisan efforts of the members of Congress who introduced the Saving Access to Laboratory Services Act (SALSA). If enacted, SALSA would fix PAMA and put the Medicare Clinical Laboratory Fee Schedule back on a sustainable path. The COVID-19 pandemic has demonstrated the clear need for patient access to timely, accurate and reliable clinical laboratory testing for the diagnosis, monitoring, and screening for all diseases. The excessive cuts under the flawed implementation of PAMA could make it far more challenging for the clinical laboratory community to invest in testing capacity and infrastructure to meet the health care needs of the country, especially in medically underserved communities and during a time when many patients are resuming routine care."

			Three Months Ended June 30,																		Six Months Ended June 30,
			2022						2021						Change						2022						2021						Change
			(dollars in millions, except per share data)
Reported:
Net revenues			$	2,453					$	2,550					(3.8)		%				$	5,064					$	5,270					(3.9)		%
Base business revenues (a)			$	2,098					$	2,039					2.9		%				$	4,110					$	3,931					4.6		%
COVID-19 testing revenues			$	355					$	511					(30.5)		%				$	954					$	1,339					(28.7)		%
Diagnostic information services revenues			$	2,384					$	2,474					(3.6)		%				$	4,925					$	5,117					(3.8)		%
Revenue per requisition															(2.6)		%																(3.9)		%
Requisition volume															(1.4)		%																—		%
Organic requisition volume															(2.4)		%																(1.1)		%
Operating income (b)			$	388					$	533					(27.2)		%				$	901					$	1,193					(24.5)		%
Operating income as a percentage of net revenues (b)			15.8		%				20.9		%				(5.1)		%				17.8		%				22.6		%				(4.8)		%
Net income attributable to Quest Diagnostics (b)			$	234					$	631					(62.9)		%				$	589					$	1,100					(46.4)		%
Diluted EPS (b) (c)			$	1.96					$	4.96					(60.5)		%				$	4.88					$	8.38					(41.8)		%
Cash provided by operations			$	402					$	460					(12.8)		%				$	882					$	1,191					(26.0)		%
Capital expenditures			$	76					$	84					(9.3)		%				$	139					$	170					(18.1)		%
Adjusted (b):
Operating income			$	435					$	584					(25.5)		%				$	989					$	1,292					(23.5)		%
Operating income as a percentage of net revenues			17.7		%				22.9		%				(5.2)		%				19.5		%				24.5		%				(5.0)		%
Net income attributable to Quest Diagnostics			$	281					$	405					(30.5)		%				$	673					$	913					(26.3)		%
Diluted EPS (c)			$	2.36					$	3.18					(25.8)		%				$	5.58					$	6.96					(19.8)		%

(a)Excludes COVID-19 testing.

(b)For further details impacting the year-over-year comparisons related to operating income, operating income as a percentage of net revenues, net income attributable to Quest Diagnostics, and diluted EPS, see note 2 of the financial tables attached below.

(c)The sum of reported and adjusted diluted EPS for the first two quarters of 2021 did not equal the totals for the six months ended June 30, 2021 due to both quarterly fluctuations in the company's earnings and in the weighted average common shares outstanding throughout the period as a result of the impact of accelerated share repurchase agreements ("ASRs") that the company entered into during April 2021.

The company raises its Full Year 2022 guidance as follows:

(a) Excludes COVID-19 testing

As used in this press release the term “reported” refers to measures under accounting principles generally accepted in the United States (“GAAP”). The term “adjusted” refers to non-GAAP operating performance measures that exclude special items such as restructuring and integration charges, certain financial impacts resulting from the COVID-19 pandemic, amortization expense, excess tax benefits ("ETB") associated with stock-based compensation, costs associated with donations, contributions, and other financial support through Quest for Health Equity (our initiative with the Quest Diagnostics Foundation to reduce health disparities in underserved communities), gains and losses associated with changes in the carrying value of our strategic investments, a gain on sale of an ownership interest in a joint venture, and other items.

Non-GAAP adjusted measures are presented because management believes those measures are useful adjuncts to GAAP results. Non-GAAP adjusted measures should not be considered as an alternative to the corresponding measures determined under GAAP. Management may use these non-GAAP measures to evaluate our performance period over period and relative to competitors, to analyze the underlying trends in our business, to establish operational budgets and forecasts and for incentive compensation purposes. We believe that these non-GAAP measures are useful to investors and analysts to evaluate our performance period over period and relative to competitors, as well as to analyze the underlying trends in our business and to assess our performance. The additional tables attached below include reconciliations of non-GAAP adjusted measures to GAAP measures.

Quest Diagnostics will hold its quarterly conference call to discuss financial results beginning at 8:30 a.m. Eastern Time today.  The conference call can be accessed by dialing 888-455-0391 within the U.S. and Canada, or 773-756-0467 internationally, passcode: 7895081; or via live webcast on our website at www.QuestDiagnostics.com/investor. We suggest participants dial in approximately 10 minutes before the call.

A replay of the call may be accessed online at www.QuestDiagnostics.com/investor or, from approximately 10:30 a.m. Eastern Time on July 21, 2022 until midnight Eastern Time on August 4, 2022, by phone at 888-566-0439 for domestic callers or 203-369-3045 for international callers. Anyone listening to the call is encouraged to read our periodic reports, on file with the Securities and Exchange Commission, including the discussion of risk factors and historical results of operations and financial condition in those reports.

Quest Diagnostics empowers people to take action to improve health outcomes. Derived from the world’s largest database of clinical lab results, our diagnostic insights reveal new avenues to identify and treat disease, inspire healthy behaviors and improve health care management.

Quest annually serves one in three adult Americans and half the physicians and hospitals in the United States, and our nearly 50,000 employees understand that, in the right hands and with the right context, our diagnostic insights can inspire actions that transform lives. www.QuestDiagnostics.com.

The statements in this press release which are not historical facts may be forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date that they are made and which reflect management’s current estimates, projections, expectations or beliefs and which involve risks and uncertainties that could cause actual results and outcomes to be materially different. Risks and uncertainties that may affect the future results of the company include, but are not limited to, impacts of the COVID-19 pandemic and measures taken in response, adverse results from pending or future government investigations, lawsuits or private actions, the competitive environment, the complexity of billing, reimbursement and revenue recognition for clinical laboratory testing, changes in government regulations, changing relationships with customers, payers, suppliers or strategic partners and other factors discussed in the company's most recently filed Annual Report on Form 10-K and in any of the company's subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including those discussed in the “Business,” “Risk Factors,” “Cautionary Factors that May Affect Future Results” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those reports.

For further information: Denny Moynihan, Quest Diagnostics (Media): 973-520-2800, Shawn Bevec, Quest Diagnostics (Investors): 973-520-2900

This earnings release, including the attached financial tables, is available online in the Newsroom section at www.QuestDiagnostics.com.

For the Three and Six Months Ended June 30, 2022 and 2021

1)The computation of basic and diluted earnings per common share is as follows:

2)The following tables reconcile reported GAAP results to non-GAAP adjusted results:

(a)For both the three and six months ended June 30, 2022 and 2021, the pre-tax impact represents costs primarily associated with workforce reductions, systems conversions and integration incurred in connection with further restructuring and integrating our business. The following table summarizes the pre-tax impact of restructuring and integration charges on our consolidated statements of operations:

(b)For both the three and six months ended June 30, 2022, the pre-tax impact represents net losses associated with changes in the carrying value of our strategic investments. For the six months ended June 30, 2021, the pre-tax impact represents a non-cash impairment to the carrying value of an equity method investment. The following table summarizes the pre-tax impact of gains and losses on investments on our consolidated statement of operations:

(c)For both the three and six months ended June 30, 2022, the pre-tax impact primarily represents a loss associated with the increase in the fair value of the contingent consideration accruals associated with previous acquisitions, and costs associated with donations, contributions and other financial support through Quest for Health Equity. For both the three and six months ended June 30, 2021, the pre-tax impact primarily represents costs associated with donations, contributions and other financial support through Quest for Health Equity. The following table summarizes the pre-tax impact of these other items on our consolidated statement of operations:

(d)For both the three and six months ended June 30, 2021, the pre-tax impact represents a gain of $314 million recorded in other (expense) income, net following the sale of our 40% ownership interest in Q2 Solutions®, our clinical trials central laboratory services joint venture, to IQVIA Holdings, Inc., our joint venture partner, for $760 million in an all-cash transaction.

(e)For the six months ended June 30, 2021, represents the impact of certain items resulting from the COVID-19 pandemic including incremental costs incurred to protect the health and safety of our employees and customers, recorded in cost of services.

(f)For restructuring and integration charges, gains and losses on investments, other items, amortization expense and COVID-19 impacts, income tax impacts, where recorded, were primarily calculated using combined statutory income tax rates of 25.5% for both 2022 and 2021. For the gain on sale of ownership in joint venture, income tax expense on the transaction resulted in an effective income rate of 17.6%.

3)For the three months ended June 30, 2022, we repurchased 1.4 million shares of our common stock for $200 million. For the six months ended June 30, 2022, we repurchased 4.0 million shares of our common stock for $550 million. In February 2022, our Board of Directors increased the size of our share repurchase program by $1 billion. As of June 30, 2022, $1.1 billion remained available under our share repurchase authorization.

4)The outlook for adjusted diluted EPS represents management’s estimates for the full year 2022 before the impact of special items. Further impacts to earnings related to special items may occur throughout 2022. Additionally, the amount of ETB is dependent upon employee stock option exercises and our stock price, and changes in the carrying value of our strategic investments are based on fluctuations in the investee's stock price, both of which are difficult to predict. The following table reconciles our 2022 outlook for diluted EPS under GAAP to our outlook for adjusted diluted EPS:

(a)Represents estimated pre-tax charges of $50 million primarily associated with workforce reductions, systems conversions and integration costs incurred in connection with further restructuring and integrating our business. Income tax benefits were calculated using a combined statutory income tax rate of 25.5%.

(b)Represents estimated pre-tax amortization expenses of $110 million. Income tax benefits were calculated using a combined statutory income tax rate of 25.5%.

(c)Represents estimated pre-tax charges of $30 million associated with donations, contributions and other financial support through Quest for Health Equity. Income tax benefits were calculated using a combined statutory income tax rate of 25.5%.

(d)Represents $37 million of pre-tax losses associated with changes in the carrying value of our strategic investments. Income tax impacts were calculated using a combined statutory income tax rate of 25.5%.

(e)Represents a $6 million pre-tax loss associated with the increase in the fair value of the contingent consideration accruals associated with previous acquisitions. Income tax impacts were calculated using a combined statutory income tax rate of 25.5%.