IDEXX LABORATORIES INC /DE Q1 FY2025 earnings call

Key Highlights - Overall organic revenue growth 5% in Q1 2025, supported by CAG Diagnostic reoccurring revenue growth and solid execution. - Profit delivery aligned with outlook, EPS $2.96 per share with 5% reported and 7% comparable growth. - Innovation focus: Launched IDEXX Cancer Dx for canine lymphoma, ramped inVue Dx with over 300 placements in Q1 and moved to broad availability in April. - Commercial Performance: Strong organic recurring revenue, high customer retention, expanded premium instrument install base by 9%, tailored commercial strategies internationally. - Software Ecosystem: Growth in practice information management systems (ezyVet, Neo) and client engagement tool Vello, with double-digit placement growth in cloud-native PIMS.

IDEXX achieved 5% organic revenue growth in Q1 2025. CAG Diagnostic reoccurring revenues had 4.5% organic growth net of a 1.5% days headwind. Water saw 7% organic growth, LPD had 4% organic growth. VetLab consumables had 10% organic growth, supported by a 9% global premium instrument install base. Rapid assay revenues declined 2% organically. Lab revenues grew 1% organically. Veterinary software and diagnostic imaging had 9% as reported growth, including 7% organic gains. CAG instrument revenues decreased 5% organically but initial placements of IDEXX inVue Dx are ramping. CAG Diagnostic recurring revenues were 4.5% organic in Q1 net of days headwind, with international CAG diagnostic recurring revenue organic growth at 8.5% and U.S. at 3% net of days headwind. Veterinary software and diagnostic imaging had 9% growth including a software acquisition, with 7% organic gains from reoccurring revenues.

2025 Guidance - Revised revenue guidance: $4,095M to $4,210M, reflecting foreign exchange and litigation expense adjustments. - Organic revenue growth outlook: 6% to 9%, with CAG Diagnostic recurring revenues expected to grow 5% to 8% including global net price realization of 4% to 4.5% midpoint. - Operating margins: Expected to be 31.1% to 31.6%, with comparable operating margin expansion of 30 to 80 basis points. - EPS: $11.93 to $12.43 per share, with foreign exchange having a negative $0.10 per share impact. - Q2 Outlook: Reported revenue growth 5% to 7.5%, operating margins 32.9% to 33.4%, with CAG Diagnostic recurring revenue midpoint at 6.25%.

• Macro and Sector Factors: Pressure on veterinary clinic visits due to economic uncertainty and sector factors. - Tariffs: Exposure to international trade tariffs, need to navigate shifting tariff landscape and manage supply chain and financial impacts.

Q: Michael Ryskin on visits and macro, follow-up on inVue Dx pacing A: Jay and Andrew discuss that while clinical visits are moderated, quality of visits and utilization remain strong, and inVue Dx is ramping with positive reception Q: Katerina on pet owner demand, tariffs A: Andrew and Jay talk about pet owner demand having some moderation but business being resilient, and IDEXX being relatively well-positioned on tariffs with supply chain focus Q: Erin Wright on Cancer Dx pull-through A: Jay mentions early strong uptake of Cancer Dx for canine lymphoma and its inclusion in wellness offerings Q: Jon Block on inVue Dx orders, FNA timing A: Jay explains inVue Dx launch process moving to full volume after controlled launch, with FNA planned for later 2025 Q: Brandon Vazquez on April wellness visits, utilization A: Andrew states Q2 guidance is based on similar clinical visit levels to full year outlook and utilization remains resilient Q: Dan Clark on macro in inVue sales A: Jay notes customers are enthusiastic about new technology like inVue Dx for workflow optimization Q: David Westenberg on pet adoption, EVI A: Jay discusses cat health focus and EVI placements driven by competitive and greenfield catalysts Q: Navann Ty on net price confidence, inVue expansion A: Andrew and Jay talk about confidence in net price realization and inVue menu expansion including future capabilities like FNA