At first glance, Quest Diagnostics’ 2025 results look like a straightforward healthcare growth story.
Revenue reached approximately US$11.04 billion, up 11.8% from US$9.87 billion in 2024.
Its diagnostic information services business generated approximately US$10.79 billion in revenue, while total diagnostic test requisition volume increased 12.3%.
But one number tells a more interesting story.
Organic requisition volume grew only 3.4%.
Quest reported that recent acquisitions contributed approximately 8.9 percentage points to diagnostic test volume growth during 2025. (Quest Diagnostics – 2025 Annual Report / SEC filing)
The same pattern can be seen in revenue. Diagnostic information services revenue increased 12.2%, but recent acquisitions contributed approximately 6.7 percentage points of that increase. Organic revenue growth across the company was 5.3%.
The numbers illustrate an important characteristic of the diagnostic laboratory industry.
There are essentially two ways to grow.
Build new testing volume yourself.
Or acquire testing volume that already exists.
For large diagnostic networks such as Quest Diagnostics, both matter.
But acquisitions can dramatically accelerate the process.
Quest Diagnostics’ Growth Was Not Organic Growth Alone
Quest processed substantially more diagnostic activity in 2025 than it had one year earlier.
Overall requisition volume increased 12.3%, while organic volume increased only 3.4%. Quest specifically attributed approximately 8.9% of the increase in diagnostic volume to recent acquisitions.
That distinction matters.
Organic growth usually comes from winning more physicians, attracting more patients, increasing test utilisation among existing customers or expanding the range of services customers use.
Those activities can produce durable growth.
But they can also take time.
A laboratory entering a new city needs collection points.
It needs relationships with hospitals, doctors and clinics.
It needs logistics routes.
It needs qualified laboratory personnel.
It needs licenses, quality systems and technology.
Most importantly, it needs testing volume.
Without sufficient volume, expensive analyzers, specialised staff and logistics infrastructure may operate below capacity.
Acquisition changes that equation.
Instead of building a customer base one physician or one clinic at a time, a diagnostic company can acquire an existing laboratory business that already has patients, referral relationships, infrastructure and testing volume.
That can turn years of organic expansion into a much shorter integration process.
Quest Completed Eight Acquisitions in 2024
Quest’s 2025 results were partly the result of a major acquisition programme undertaken during the previous year.
The company said it completed eight acquisitions during 2024, including LifeLabs in Canada and four hospital outreach laboratory acquisitions.
The scale of investment was substantial.
Quest’s 2025 annual report shows that its 2024 acquisitions had an aggregate purchase price of approximately US$2.2 billion.
The largest transaction was LifeLabs.
Quest acquired the Canadian diagnostic laboratory company in August 2024 for approximately C$1.35 billion, or roughly US$1 billion, including net debt. LifeLabs brought Quest a significant existing laboratory network rather than simply additional laboratory equipment.
In 2025, LifeLabs processed approximately 23 million test requisitions and operated around 15 laboratories and more than 350 collection centres across British Columbia, Ontario and Saskatchewan.
That is what makes laboratory M&A strategically powerful.
Quest did not need to build those relationships, collection sites and testing volumes from zero.
It acquired a functioning network.
Buying Existing Volume Can Accelerate Geographic Expansion
LifeLabs was only one part of Quest’s acquisition programme.
During 2024, Quest also acquired laboratory businesses or selected laboratory assets from several healthcare organisations.
These included selected outreach laboratory assets from Allina Health, OhioHealth and University Hospitals, as well as laboratory operations associated with physician groups in New York.
Quest paid approximately US$230 million for selected Allina Health outreach laboratory assets, US$200 million for selected OhioHealth assets and US$183 million for University Hospitals’ outreach laboratory business.
The strategic logic is straightforward.
If Quest wanted to enter these markets entirely through organic expansion, it would need to establish relationships with physicians and healthcare systems, build collection infrastructure and gradually move samples into its laboratory network.
Buying an established outreach laboratory business can accelerate that process.
The transaction provides something more valuable than laboratory equipment.
It provides existing testing demand.
That is why customer relationships appear prominently among the intangible assets recorded in Quest’s acquisitions. Quest’s filings show hundreds of millions of dollars allocated to customer-related intangible assets from its 2024 transactions.
In laboratory diagnostics, customer relationships can be a significant economic asset.
Build vs. Buy: Why Laboratories Face a Different Growth Equation
Most businesses face some version of the build-versus-buy question.
But diagnostics makes the calculation particularly interesting because laboratories have significant fixed infrastructure.
A diagnostic network may already operate central laboratories, analyzers, logistics systems, information technology platforms and specialist departments.
Adding more volume to that infrastructure can improve utilisation.
Imagine a laboratory analyzer capable of processing thousands of tests daily.
If it is operating at only part of its capacity, additional testing volume may improve the economics of the equipment without requiring another equivalent capital investment.
The same logic applies to logistics.
A courier route that collects samples from ten clinics may be able to serve additional locations without costs increasing proportionally.
Specialised expertise can also be shared across a larger network.
A smaller laboratory may not have enough demand to justify employing specialists or operating highly specialised molecular, genomic or oncology platforms.
A large laboratory network can aggregate demand from multiple regions and healthcare providers.
That creates potential economies of scale.
Acquisition therefore does not only increase revenue.
It may also increase the utilisation of an existing network.
Quest Explicitly Uses Acquisitions as a Growth Strategy
Quest does not treat M&A as an occasional activity.
Its annual report explicitly describes acquisitions as part of its growth strategy.
The company says it evaluates acquisitions based on factors including strategic fit, value creation, return on invested capital and impact on earnings.
More importantly, Quest states that it seeks to grow annual revenue by approximately 1% to 2% through acquisitions.
That is a meaningful strategic commitment.
For a company generating more than US$11 billion in annual revenue, even 1% to 2% represents a substantial amount of additional business.
And 2025 demonstrates how acquisition contributions can sometimes be significantly larger.
Recent acquisitions contributed approximately 6.7% to diagnostic information services revenue growth and 8.9% to requisition volume growth during the year.
This does not mean organic growth is unimportant.
Quest still generated organic volume growth of 3.4%, and organic revenue growth was also meaningful.
Rather, the numbers show how M&A can work alongside organic growth to accelerate expansion.
Partnerships Can Be an Alternative to Full Acquisition
The strategy is also broader than simply buying laboratories.
In 2025, Quest continued developing partnerships with healthcare systems.
One example is Corewell Health in Michigan.
Quest and Corewell Health agreed to create a laboratory-services joint venture, with Quest holding 51% and Corewell Health 49%. The venture includes plans for a new laboratory facility, alongside Quest providing broader collaborative laboratory services to the health system.
This illustrates another possible growth model.
The choice is not always between owning a laboratory and competing with it.
Large diagnostic companies can also partner with healthcare systems.
A hospital can retain strategic involvement while gaining access to the scale, technology and specialised capabilities of a larger diagnostic network.
For the laboratory industry, this creates several potential models:
organic expansion, acquisition, joint ventures and long-term laboratory partnerships.
What Could This Mean for Vietnam’s Diagnostic Market?
Vietnam’s diagnostic laboratory market is at a very different stage of development from the United States.
It remains considerably more fragmented, with testing distributed among hospital laboratories, independent laboratories, clinics and diagnostic centres.
But as the market grows, laboratory operators may eventually confront the same strategic question.
Suppose a diagnostic group wants to expand from Ho Chi Minh City into another major city.
It has two broad options.
It can build.
That may mean establishing a laboratory, recruiting personnel, purchasing equipment, opening collection centres, developing doctor relationships, creating logistics routes and gradually building local testing volume.
Or it can buy.
An existing laboratory may already have licensed facilities, experienced personnel, local healthcare relationships, existing patients and recurring testing volume.
The acquisition price may be higher upfront.
But the buyer could potentially gain years of market development immediately.
The same calculation applies to specialised testing.
A laboratory seeking to enter molecular diagnostics, genetics, pathology or oncology testing can either develop expertise internally or acquire a specialist laboratory that already possesses those capabilities.
Neither approach is automatically better.
The answer depends on valuation, laboratory quality, management, customer retention, integration risk and potential operating synergies.
But as diagnostic markets mature, build versus buy becomes increasingly important.
M&A Does Not Guarantee Success
Quest’s strategy should not be interpreted as evidence that every laboratory acquisition creates value.
M&A introduces significant risks.
A buyer can pay too much.
Physicians can move their testing business elsewhere.
Key employees can leave.
Information systems may be difficult to integrate.
Laboratory standards may differ.
Collection networks may overlap inefficiently.
Expected cost savings may never materialise.
Quest itself acknowledges that acquisitions differ significantly and that integrating businesses with different systems, processes, policies and cultures can require substantial effort.
Therefore, buying volume is not enough.
The acquired volume must be retained and integrated efficiently.
That distinction separates successful diagnostic platforms from businesses that simply accumulate laboratories.
The Strategic Question for Vietnam: Build or Buy?
Quest Diagnostics’ 2025 numbers provide a useful case study.
Revenue increased 11.8%.
Diagnostic requisition volume increased 12.3%.
Yet organic requisition volume increased only 3.4%.
The remaining growth was driven largely by acquisitions, with recently acquired businesses contributing approximately 8.9 percentage points to volume growth.
That does not make organic growth less important.
It demonstrates how powerful external growth can become when combined with an established diagnostic platform.
For Vietnam, the same strategic question may become increasingly relevant as the laboratory industry expands.
Will the next generation of diagnostic groups build national networks laboratory by laboratory?
Or will they acquire regional laboratories, specialist testing businesses and existing collection networks?
Some will probably do both.
For investors watching Vietnam’s healthcare sector, that makes diagnostic laboratories particularly interesting.
The opportunity may not simply be in building more laboratories.
It may be in deciding which laboratories should be built — and which ones should be bought.