Quest Diagnostics (DGX) Q2 2026 earnings call transcript

I'd now like to introduce Dan Hammerley, Vice President of Finance for Quest Diagnostics. Please go ahead, sir. Thank you, and good morning. I'm joined by Jim Davis, our Chairman, Chief Executive Officer and President, and Sam Sam Samsomad, our Chief Financial Officer. Also joining us is Dominique Chocchi, our new Head of Investor Relations, who joined Quest Diagnostics last week. During this call, we may make forward-looking statements and will discuss non-gap measures. We provide a reconciliation of non-gap measures to comparable gap measures in the tables to our earnings press release. Actual results may differ materially from those projected. Risks and uncertainties that may affect Quest Diagnostics future results include, but are not limited to, those described in our most recent annual report on Form 10K, and subsequently filed quarterly reports on Form 10K, and current reports on Form 8K.

For this call, references to reported EPS refer to reported diluted EPS, and references to adjusted EPS refer to adjusted diluted EPS. Growth rates associated with our long-term outlook projections, including consolidated revenue growth, revenue growth from acquisitions, organic revenue growth, and adjusted earnings growth, are compound annual growth rates. Now, here's Jim Davis.

Thanks, Dan, and good morning, everyone. Before we get started, I want to welcome Dominique, who brings to Quest a strong record of investor relations and financial management experience from her nearly two decades with Merck. I also want to thank Dan for his leadership over the past few months as we completed the hiring process. Dan will continue to work closely with Dominique over the coming weeks as she transitions into this new role.

Now, turning to our results, our strong performance in the second quarter demonstrates focused execution of our strategy to connect people and providers to innovative testing and actionable insights that illuminate past or better health. In the quarter, we grew revenues by over 10%, driven by broad clinical demand from physicians, hospitals, and consumers, and increased volume from our collaborations with core well health and personius medical care. We also grew adjusted diluted earnings per share by over 19%. Our implementation of automation and AI across our business is driving continuous improvements in quality and productivity, both in and outside our labs. We are also using advanced technologies to make it easier for our customers to engage with us and draw greater insights from our lab data.

With our strategic execution and demographic and technological trends driving sustained demand, we are again raising our guidance for the year.

I'll now provide more detail on how we executed our strategy across our key customer channels and operations during the quarter. Quest diagnostics operates at the center of health care, providing insights to make health more proactive, personal, and connected. We deliver solutions that make testing simpler and smarter for our core clinical customers, physicians, and hospitals, as well as for our customers in the higher growth areas of consumer health, life sciences, and data analytics. In the physician channel, we delivered high single digit revenue growth in the second quarter on broad base demand for our clinical innovations, new customer wins, and increased business with existing customers. We continue to deliver strong growth in several geographies where we have expanded our reach to physicians through increased health plan access and acquisitions in recent years.

We also continue to grow our enterprise accounts, especially in clinical areas where providers value our ability to deliver solutions that serve the growing interest in prevention and wellness. In addition, our collaborations with personius medical care continue to support growth in the quarter. Through this relationship, we have fostered new capabilities for serving a prologist and other providers, caring for the nearly 36 million people in the U. S. with chronic kidney disease. Today, we provide a highly comprehensive kidney testing portfolio, spanning risk assessment to post-transplant monitoring for providers focused on this growing area of medicine. In the hospital channel, we grew revenues at a double digit rate during the quarter, primarily from co-lab solutions with core well health in Michigan.

In addition, revenues from reference testing grew versus the first quarter and prior year. Hospitals continue to contend with workforce, financial, and other pressures. As a preferred strategic partner, we empower hospitals to improve quality, expand access to new test innovations, and maximize cost efficiencies in capital allocation. As one example during the quarter, we formed a new co-lab agreement with a non-profit regional health system in California. Through these deep relationships, we have created a strong pipeline of potential collaborations and acquisitions of hospital outreach as well as independent labs. In the consumer health channel, we deliver solutions that enable people to own their health. Wellness is not the absence of sickness. It's health that is proactive, personal, and connected.

And we're helping to make wellness possible by illuminating early signals of disease and by making it easier for people and partners to link our biomarker insights with biometrics. We expect to continue to expand our own platform and solutions for partners as interest and investment in preventative health and wellness continues to grow. During the quarter, QuestHealth. com continued to generate robust revenue growth and strong demand for existing wellness panels and new services, such as our thyroid test offering. In addition, we continue to attract new partners as a result of our diagnostic innovations, flexible technology integrations, and scale. Our customer channels are also growing as we continue to deliver advanced diagnostics in five key clinical areas. Advanced cardiometabolic and endocrine, autoimmune, brain health, oncology, and women's in reproductive health.

During the quarter, we grew revenues by double digits across several of these areas. These include advanced cardiometabolic tests like APOB and LP-A, as well as liver fibrosis testing, an area poised for additional growth given new treatments for late-stage liver disease. We also continue to drive strong growth for our analyzer solution, which aids the diagnosis of autoimmune disorders. In brain health, we continue to drive robust double-digit growth across our portfolio of AD detect blood tests, which include amyloid beta, p-tow, and other biomarkers demonstrating the clinical value of our multi-biol marker approach to dementia care. In oncology, we achieved key milestones for haystack MRD during the quarter. New York State approved the test placing it among an elite group of solid tumor CTDNA MRD tests to fulfill the state's rigorous quality criteria.

This approval allows us to extend our commercial efforts to all 50 states. We also became the largest reference lab to extend access to cancer tests such as haystack MRD through Flatiron Health Onco-EMR molecular profiling integration platform. We began a pilot of the solution with American Oncology Network, a leading community oncology organization and planned to roll it out to Flatiron's 4,700 clinicians and other providers nationwide later this year. I'd like to turn now to operational excellence. We remain on track to deliver 3% in annual cost savings and productivity improvements through our invigorate program. We are also making testing simpler and smarter by investing in AI and automation to improve our operations, services, and experiences both in and outside our labs.

For instance, in our labs, we recently installed the whole-logic Genius Digital Diagnostic System in two more locations following successful implementations at about half a dozen sites over the past year. The system first digitizes a PAP test slide and then uses AI to scan for signs of cervical cancer, helping to improve the quality of the slide review by our medical team. Our front-end specimen processing automation is delivering meaningful gains in productivity and we look forward to extending the solution to other sites later this year.

Beyond our labs, we recently launched IntelliDraw, a web-based tool that guides the clinical staff of our physician customers through the process of specimen collection, improving quality, and the service experience. In addition, we will be implementing an AI tool at patient service centers this year to cut the time it normally takes to track and order supplies. Overall, we are pleased with our growth, momentum with customers, and strategic execution in the second quarter. I'll now turn it over to Sam for more details on our performance and guidance. Sam?

Thanks, Jim. In the second quarter, consolidated revenues were $3.04 billion, up 10.2 percent versus the prior year. Consolidated organic revenues grew by 10 percent. Revenues for diagnostic information services were up 10.3 percent compared to the prior year. With 10.1 percent organic growth, reflecting strong growth in our physician, hospital, and consumer channels. Total volume measured by the number of requisitions increased 13.1 percent versus the second quarter of 2025, with organic volume up 13 percent.

Our court-level health and personius medical care relationships contributed 9 percent to volume in the quarter, excluding these two relationships volumes grew by 4.1 percent. As anticipated, total revenue for requisition was down 2.8 percent versus the prior year due to the court-level and personius business mix. Adjusting for that business mix, revenue for requisition was up by 2.9 percent versus prior year. Driven primarily by an increase in the number of tests for requisition.

Unit price reimbursement remained flat, consistent with our expectations. Reported operating income in the second quarter was $459 million or 15.1 percent of revenues. Compared to $438 million or 15.9 percent of revenues last year. On an adjusted basis, operating income was $502 million or 16.5 percent of revenues, compared to $466 million or 16.9 percent of revenues last year. The increase in adjusted operating income is largely due to organic revenue growth, partially offset by wage increases. Operating income as a percent of revenues was impacted by investments in Project NOVA and the lower operating margin rate associated with the ramp of the Caldwell CoLab business. Operating income was also adversely impacted by higher supplemental deferred compensation expenses. The total of all three drivers amounted to a 70 basis point reduction of operating income as a percent of revenues.

Reported EPS was $2.84 in the quarter compared to $2.47 a year ago. Adjusted EPS was $3.12 versus $2.62 the prior year.

The improvement in EPS in the second quarter was largely driven by strong organic operating performance, as well as the favorable resolution of various tax contingencies which contributed 10 cents of EPS in the quarter. As previously indicated, adjusted EPS grew by 19.1 percent and excluding the one-time tax benefit grew by 15.3 percent. Cash from operations was $875 million year to date through the second quarter versus $858 million in the prior year.

This year-over-year increase is the result of higher operating income in the current year, largely offset by a one-time CARES Act tax credit a year ago. Turning now to our updated full-year 2026 guidance. With our strong first-half performance and continued momentum, we are raising our full-year revenue and EPS estimates. We now expect revenues to be between $11.95 billion and $12.05 billion reflecting a growth rate of 8.3 percent to 9.2 percent.

Reported EPS to be in a range of $9.97 to $10.17 and adjusted EPS in a range of $11.05 to $11.25. Cash from operations to be approximately $1.8 billion and capital expenditures to be approximately $550 million. Our 2026 full-year guidance reflects the following considerations. The revenue guide does not include any contribution from prospective M&A. No of our expenses are unchanged for the full year but we anticipate increased spend in the higher fuel costs in the second half of 2026 versus prior expectations.

Operating margin is expected to expand versus the prior year. Share count is expected to be slightly below 2025. Interest expense to be consistent with 2025 and adjusted effective tax rate is now expected to be consistent with 2025.

With that, I'll now turn it back to Jim.

Thanks, Sam. In summary, during the quarter, we generated robust top and bottom line growth on focused execution of our strategy and sustained demand across physicians, hospitals, and consumers. Revenues increased by over 10 percent, almost all from organic revenues, while adjusted diluted EPS grew by over 19 percent. Given our growth momentum and continued interest in our lab insights, we are again raising our guidance for the full year.

As we head into the back half of the year, we remain focused on our strategy to connect people and providers to innovative testing and actionable insights that illuminate past for better health. I'm going to close by thanking my colleagues across Quest to enable those insights with care and commitment every day. Now we'd be happy to take your questions.

Operator?

Sure. Thanks, Aaron. Good morning. So when we look at our hospital business, as you know, we look at it in two pieces. One is our pure reference business. And the second is our co-lab business. Now, in total, that portfolio was up significantly driven primarily by the core well-held relationship. But let me give you a couple of the pieces underneath. Our core reference business, which is hospital labs referring work out to quest diagnostics. The revenue growth was mid-single digits, and actually the volume grows slightly higher than that. So we are seeing no slowdown at all from reference testing coming to quest diagnostics. Now, if we look at our co-lab business, X core well, and we just look at same store sales year over year, we see, again, mid-single digit growth in that book of business.

So we're not seeing any slowdown in our hospital business, whether it's co-lab or reference. You mentioned that that is not a concern with hospitals or any of our client bills. We're not seeing any bad debt trends at all. We mentioned in the prepared remarks that we took on one new relationship with the regional hospital in California, supply chain relationship.

And the opportunities as we look into our funnel and look out for the rest of the year look good.

Great.

Yeah, so the guidance, Lisa, has not changed. We still think it's a 30 basis point impact. Now, look, we've all seen the data on enrollment. Enrollment is down north of 20 percent estimates of 21 percent. I think we've read. But that's not translating into our business. So, what we do see is the following. We see a rec volume growth that's down around 8 percent.

However, the tests per rec are up 6 percent. So, we see fewer recs, but we're getting more tests per rec. Now, why is that? Because I think the common wisdom is prevailing here, that the healthier people dropped off, the sicker people remained. So, what we see is a book of business that is only down 2 percent from a test standpoint. And quite frankly, it's flattish from a revenue standpoint, because the mix of tests, the test per rec, and a little bit of payer mix is keeping our revenue from the exchange relatively flat. Now, could it get worse in the back half of the year? Maybe. But at this point, we're not seeing a major impact on our business.

So, Lisa, just to reaffirm what Jim said, in terms of our guidance for the year, we're still assuming, for the full year, that there's a 30 basis point impact on revenue from the ACA exchange subsidy exploration. Great.

Thanks for taking the question. Maybe if I can just jump into the back half assumed margins. You talked about your margin improvement. That means that the second half margins, just based on your day math, have to be a bit better. When we square together the timing of the NOVA expenses and the gas price increases, can you give us the offsets that help build towards that second half margin ramp that in getting you year over year margin expansion? Thank you. Yeah, for sure, Michael. So, I mean, first, let me talk a little bit about Q2, and then I'll talk about the second half. Again, to reconfirm in terms of Q2, our operating margin was 16.5 percent with down 40 basis points from the same quarter last year.

Now, that was impacted by, I would say, three key things that I think we need to keep in mind. One is NOVA, which was probably about 20 basis points of that. You've got also the impact of Corwell and Fresenius, which is about 30 basis points. And then you've got SBCP, so supplemental deferred compensation plans, which is how we value this plan, these investments that we have, we essentially mark to market them. And that was a 20 basis point impact on the quarter. So if you put all those together, that was a 70 basis point impact. Now, as we look forward for the rest of the year, yes, we are still expecting for the full year that we are going to be up in terms of operating margin.

So what are the things that change? We do have, you know, in the back half of the year on the headwind side, we have fuel costs, as you said. Right now, we're expecting the fuel cost impact for the year to be at the high end of the range that we previously gave, which is equivalent to close to about $10 million. We're expecting NOVA expenses in the second half to be, to be about 70% of the full year, previously we had said about 60%. So we've changed that expectation a bit.

But the things that are offsetting that are two key things. I mean, number one, you know, continued growth in volumes and continued strength of volumes. Number two is we lap Corwell and Fresenius in Q4 of the second half. So, you know, you see less of a dilutive impact from Corwell and Fresenius in the second half on our total operating margin. So, again, still expecting operating margins to be up for the full year versus prior year. Great.

So, thank you for the question. This is Sam. So, with regards to Corwell, still in line with what we had said at the beginning of the year, which is basically that it's a 250 million impact, positive impact on our revenues this year in total. So, it's largely playing as expected. I would say the margin rate, which we had said is going to be in the low single digits improving the mid-single digits, is still largely playing out as we expected. So, really no meaningful change in terms of our expectations from Corwell, the deal is going or the Colab relationship right now is going really well. We anticipate to scale this up to a JV next year as we build the lab in Michigan.

And we look to launch that JV in early next year. With regards to pricing, so I'm not sure if your question was specific to Corwell or overall, but with regards to overall pricing for the company, our pricing expectations are still the same, which is we expect basically roughly flatish pricing year over year. And that's what we're seeing actually in Q2. And we see, I would say, a positive, flat to slightly positive impact from the health plans. We see slightly negative impact from the hospital reference business, which is largely playing out as expected. No change there. It's a competitive sector, and the pricing is slightly negative there. So, but overall, I would say, pricing for the company overall is still relatively flat.

The other thing you didn't ask, but it came up in the prior question, the percentiest book of business is a significant revenue increase year over year as well, close to $100 million. And the margin profile of that business continues to improve from Q1 to Q2 to Q3 and into Q4. So, that is also giving us lift from an operating margin perspective in the second half of the year. Great.

Thank you. Yeah, thank you, Anne. So, this is Sam. You know, I would say to re-emphasize or reconfirm what Jim said earlier, we are not seeing any meaningful change in terms of bad debt. Okay, bad debt is still very much in line with our expectations, with what we were seeing last year and in previous periods. So, I know the hospitals have talked about some challenges there, but we have really not seen any meaningful impact for us. You know, we track, obviously, hospital collections very closely. We make sure that, you know, we are on top of those. And in fact, we have not seen any deterioration in terms of the rate of collections or the time of collections from hospitals.

We track those really on a very diligently every quarter. In terms of, I'd say the one thing that we also look at is patient concessions, which we track closely as well to see if there's any deterioration in terms of our ability to collect from patients for, you know, co-pay, for, you know, amounts that patients owe us. And usually, that hovers around, I would say, 5% or so of revenues. And that, in fact, has also not seen any material or any deterioration at all. In fact, it's slightly improved this quarter versus last year, same quarter. So, you know, both in terms of bad debt, which we track really closely and we manage very closely. And in terms of patient concessions, we are not seeing any adverse impact of both of those.

And you asked on, you know, what our policies are, with respect to patient concessions, first of all, we have a sliding scale for people that are at the poverty below the poverty slightly above the poverty line. Second is, after time, we do turn the receivables over to collections agencies. And we have some success with that. The last thing I would tell you is that when a patient comes back into our patient service center, if they owe us a significant amount of money, we actually require them to pay off the people we provide that next service. So, we have pretty tight controls over patient balances. And I think we manage it very effectively. Great.

Thank you for taking our questions. I think that's on the quarter. It was wondering if you could talk about, now, let's understand why DSOs are up again, both year over year and sequentially in the quarter. Thanks again. Yeah. So, there's a couple of reasons for that. One is minor, which is technical around the number of deposit days that we had in the quarter, which is really just a technical item, doesn't have anything to do with performance of receivables. The other one has to do with mix, our business mix. As we see some of our client bill portion of the business, specifically our consumer business as well, increase, and it's increasing quite robustly. Those have higher DSOs and higher collection, or longer collection periods, then our health plan, reimburse business, our third party payer business.

So, really, this has just to do with a business mix nuance in our revenues overall.

Yeah. So, thanks for the question. So, look, at this point, there's three possible outcomes on PAMA. I think, as you know, the first is there's a current data collection process going on by CMS, and that data collection process ends on July 30th. We expect to hear something let's say late September, early August. Now, at this point, we don't have any idea on how many of the 10,000 labs are going to report the data. What we do know last time is that only 1% of the lab submitted data, but if that process continues on, there could be new rates that are implemented by CMS effective January 1st. The second outcome is we get the Results Act pass.

The bill, the Results Act, it was introduced last September, September of 25. It has incredibly strong bipartisan support. Over 115 co-sponsors have signed on. In addition, there's 60-ish patient and consumer-based organizations that are endorsing the bill. There's been one successful hearing in the House Energy and Commerce Committee, but it still needs to go through a markup process. It has to be scored by CBO, and CMS needs to do their own tech assessment of that. So, no matter what, we are going to continue to push for the Results Act. Even if CMS does go ahead and implement new rates, we still push for the Results Act because we believe it's a better and fair way of collecting the data and collect some of the flaws under that original process.

As you know, as part of the Results Act, we've advocated for a third-party group that collects adjudicated claims across the industry, and we believe it's a much more effective, higher quality, and more efficient way to arrive at what is. If Results is not passed, we will again push for another delay. As you know, there's been six delays now. Congress has acknowledged that the original PAMA cuts were not sustainable.

The original estimates on those cuts, by the way, provided by CBO, was on the order of $2.5 billion in savings over 10 years. But the first three cuts that were executed in 18, 19, and 20 actually saved the government $4 billion over a three-year period. So, there's acknowledgement that the process, as originally designed, did not work as intended. And so, if we don't get results done this year, we will push, obviously, for another delay. Thank you.

Are you seeing any changes in that perspective? Thanks. Yeah. So, again, on the hospital side, there's multiple ways we work with hospitals. One is just, we take on their reference work, work that they choose not to do. So, I indicated in previous comments, that book of business grew nicely in the second quarter. So, maybe what we are seeing is a willingness to outsource more tests, those tests that, you know, they don't feel they can make money on.

The second way we work with them is through these co-lab arrangements. Again, we closed one arrangement in the second quarter in our pipeline of other opportunities from managing the health systems laboratories. That funnel of opportunities looks good. The third way we work with them is on outreach deals. And the funnel of outreach deals continues to be good. Some deals are better than other deals. We would like to work with health systems that are growing, that are expanding their services, expanding their doctors, as opposed to working with health systems that are closing hospitals, shedding hospitals, and shedding doctors. So, those are the kinds of health systems that we search for. We also look into markets where our presence may not be that strong, and is a good way to get a foothold into that local market.

We'll reach out to these hospitals and see if we can't work with them more closely.

Good morning, Kevin. This is Sam. So, I think you've hit on the key things there, frankly, in terms of some of the things that are driving REV for REV. So, yeah, revenue for requisition was very strong in the quarter. It was up 2.9% if you exclude the core well and for strenuous mix impact on that. And really, the key things, number one, I would say test for REV is definitely continuing to improve. So, we continue to see that test for REV number creep up every quarter. And I think I mentioned before the stat where prior to COVID, we were sitting at somewhere between three and a half and four tests per rec. And today, we're somewhere almost north of four and a half.

So, we've added almost an additional test per rec, which really makes a big difference on the revenue per requisition. You mentioned consumer and that's definitely also helping revenue per requisition. These are high value or high, very robust panels. Let's put it this way with a very high value REV per rec as well. So, some of that consumer business that we have, well, we power a lot of these functional and wellness companies that are operating in this space. And advanced diagnostics or esoteric mix also helps drive REV per rec as well. So, I think you mentioned the key things, but I would say test per rec is really the key one.

Consumers definitely helping as well. Those are the two key main ones. Yeah, just to add a little color there, on the advanced diagnostics, our brain health portfolio continues to grow at high double digit rates. And it's both the peak towel markers as well as the amyloid plaque markers, the AB4240. Our cardio metabolic, advanced cardio metabolic book, the business continues to grow at significant rates. The AB, the APOB, the LP little A and also the insulin resistance test are robust. And then finally, autoimmune disorders continue to grow. And this analyzer assay that we have put out for primary care physicians that helps them diagnose autoimmune disorders and helps them refer the patient to the right specialist.

Now, all of those things, by the way, are not mutually exclusive, right? These kind of work together. Many of these advanced diagnostics were seen in the functional health space. And because of many of the chronic conditions, whether it's diabetes, HIV, Hepatitis C, Hepatitis B, we're seeing a pickup of testing from those types of patients as well. Great.

And I'll talk about the deal with five higher and how we should think about that partnership. Thanks. Yes, thanks, Pito. So importantly, we did get New York State approval of our haystack tumor-informed test in the quarter. I believe there's only one other company that has approval from New York State from a tumor-informed standpoint. I think there's some naive tests that they've approved as well. But the New York State approval process is very, very rigorous. So we believe it sends a strong signal about the quality and efficacy of the assay that we have. New York is also an important market from a cancer standpoint. You have strong memorial, the upstate institutions. So a lot of big cancer institutions in New York that this will open us up to.

So we feel good about that. The flat-iron relationship is significant. It just provides ease of ordering to a large, large group of medical oncologists across the country. So we're now integrated into Epicora. We're now integrated into flat-iron. We have our own portal as well. And these are all things that just make ordering and tracking of test results simpler and easier for clinicians. You know, what I would tell you, look, we're pacing our commercial investments. And we're pacing the growth of tests that we're doing, commensurate reimbursement. We don't want to get too far out in front of ourselves. We don't need to get too far out in front of ourselves because the switching costs are next to nothing.

A clinician can switch. So we're driving reimbursement. As you know, we sit in the Novotos Mac and then we've submitted to MOLDEX for Medicare Advantage reimbursement. And hopefully that comes in the back half of this year. Great.

Yeah. Thanks. So again, the utilization remains strong. So if we look at the primary segments in the business, we talked about hospital systems, our reference book of business, mid-single-digit growth, our core physician business. So X, consumer, X, all the wellness, our core consumer business also is getting growth in the high single digits, both volume and revenue.

And then finally, our consumer business, you know, last year we sized the entirety of that consumer business, both direct and indirect at about $250 million. We said it would grow in 2027, somewhere between 20 and 30%. And I would tell you right now, it's on the high side of that estimate. So feel good about the utilization through those channels as well. So put all that together and it's painting a good utilization story. Now, look, it's driven by two things, driven by multiple things. One is, you know, the chronic conditions that continue to exist in this country as well as this consumer, you know, taking on of their own health and taking charge of their health and looking for the signals off their body to get in front of sickness trends.

So we feel good. And the only other thing I would add is we're three weeks here into July and the volumes thus far three weeks into the quarter are consistent with what we saw in the second quarter.

I'd add a couple of things, Patrick, this is Sam. So, first of all, you know, really to add to what Jim said, the utilization has been very strong. And we really are expecting the same tailwind to continue in the second half. So really no assumption of any slowdown or anything different on utilization. There are two or three key things I think that are more around, you know, that are more discreet. Let me put it this way. The ACA subsidies, we're still expecting that there's going to be a call at approximately 30 basis point impact on the year. So obviously, that will have a higher impact on the second half. You know, we lap Colwell and Fresenius in Q4 so that has an impact on the year over year growth rate, at least in the second half and specifically in Q4.

You know, elevates where we gained access in four key states back in Q1 of 2025, you know, that we continue to see good progress and progression on that. But we're deep into the second year, at least in the second half. And that's going to start to slow down as we lap some of those wins. And then finally, I would say one key thing is weather in Q3, always a wild card. Last year we had very little weather disruption, thankfully. We hope it's the same in Q3, but that's not what we're counting on at this point when we look at our outlooks and when we build some what we call weather wrecks in our outlooks. So those are the few key discrete things that impact growth in the second half, but everything else in terms of the core utilization is just very strong.

In terms of pricing, you asked on the pricing with health plans. I would say those conversations, those renewals are very constructive. We have great partners that we are working constructively with. They recognize and see the value that we bring in terms of high quality testing, but really lower cost testing into their network. So I think that's playing out as we expected in terms of, as I said earlier, flattish pricing. Great.

Thank you. Yeah, so on the first part of your question, Shield Garden, we don't comment on volumes of that test. As you know, we offer it on our menu, and we offer to do draws at a price, obviously. The garden pays us for that. But they'll talk to volumes, I'm sure, on their call. On haystack, from a clinical evidence standpoint, look, we're solid from a colorectal cancer standpoint. We have some great studies that have been published along the way and feel good about that. We have ongoing studies across breast and lung that will also pay through. But look, at the end of the day, there's both clinical evidence, and just proving that your assay from a sensitivity and specificity is leading in one of the best that you will approach.

We're going to present the clinical evidence, but we also have very good evidence that when we look at the sensitivity, specificity of the haystack assay, when we look at the detection in terms of parts per million, it's a leading test. Great.

Okay. So on Elephants, yes, they are now reimbursing for the PTAL-217 biomarker. It's a biomarker we offer. It's actually, we get it through one of our suppliers. There's a range of suppliers that offer the test. They're all very similar. They are not yet reimbursing, though, on the other very important biomarker called AB 4240. At the recent international Alzheimer's conference, there is widespread perspective of the importance of both biomarkers, both the PTAL biomarker as well as the AB, the amyloid biomarker we call AB 4240. So, and by the way, that's the panel, that combined panel, along with an algorithmic interpretation of that that provide that we are selling today, and it's doing quite well. In terms of, look, there's other payers that are certainly reimbursing for one or both of these tasks.

Medicare, there's broad reimbursement and Medicare advantage. There's broad reimbursement of those panels. And you can imagine, the majority of the testing we see is patients that are above 60 years of age. I'm not, we're not going to provide today the absolute size of that business. But what I did say in an earlier question is that it is growing in the high, high, double digits. Great.

Great. And good to hear from you, Jack. We're glad you're still on the calls with us here. So, I, there was an earlier question, maybe quite attention, but I'll just again, three possible outcomes from a PAMA perspective. First is the current data collection process, which I think everyone knows about. It ends on July 31st. We have submitted, by the way, we would expect CMS to report out on that in the September, late September, early October timeframe. What we hope to hear is also some assessment of the quality of the data and the number of labs out of the 10,000 labs that submitted. As you know, last time, only about 1% of the labs submitted, and it was a very, very biased statistical sample of actual laboratory market-based pricing.

The second possible outcome is we get the results act passed. There is broad support, bipartisan support. Over 115 co-sponsors have signed on, as well as many other patient and consumer organizations. There's been a hearing with the House Energy and Commerce that was viewed as favorable. And as you know, as part of the results act, what we've, what we've put forward, or what our Trade Association and others have put forward, is that there's a third party used to provide a really good, robust statistical sample of all the educated claims in the industry.

If the results act is passed, by the way, rates stay flat for 27 and 28 would be a data collection of the 2027 data, and new rates would go into effect in 2029 with a cap of no more than 5% cuts per year. And then the third possible outcome, if we can't get results through this year, is another delay. And as you know, there's been six delays. Why? Because Congress has acknowledged that the pamma cuts were not sustainable, and the process was not, didn't come out as intended. So those are the possible outcomes under any scenario we push for results, even if CMS was to set new rates based on this data collection process that's going on, we'll still push for results.

We'll never best approach to, to, to figure out what the actual market rates are for laboratory testing. Okay. Great.

Okay. Thank you, everyone, for joining in today. We certainly appreciate the continued support. We'll see some of you soon. And thank you and have a great day.