IDEXX Laboratories, Inc. Q4 FY2025 earnings call

• IDEXX delivered excellent financial performance in Q4 2025 with double-digit top-line gains, including 14% reported revenue growth and 12% organic growth. - Achieved record premium instrument placements in Q4, with over 1,900 InVue DX placements. - Full-year 2025 operating margins were 31.6%, up 90 basis points. - Successful innovation launches like InVue DX, CancerDx, and Catalyst tests, with Catalyst having significant menu expansions. - Commercial expansion in key international regions, enhancing team presence in Germany, UK, Australia, etc. - Strong customer retention in CAG Diagnostics, with global business having high nineties retention. - Software ecosystem growth, with practice information management systems and pet owner engagement tools like Velo showing strong momentum.

In Q4 2025, IDEXX's organic revenue growth was 12%, with key segments: CAG Diagnostics had 13% organic growth, Water 10%, LPD 4%. Worldwide CAG Diagnostics recurring revenue was up 10% organically in Q4, with US CAG Diagnostics recurring revenues up 9% organically. VetLab consumable revenues were up 15% organically, driven by a 12% increase in the global premium instrument installed base. Rapid Assay declined 3% organically in Q4. Reference Lab revenues expanded 9% organically in Q4. Imaging revenues were up 13% organically. Water revenues had 10% organic growth in Q4, and LPD had 4% organic growth. Revenue contribution percentages: CAG Diagnostics recurring revenues were a significant part, with 10% organic growth in Q4 and 8% for full year 2025.

• 2026 revenue guidance: $4.632 billion to $4.72 billion, 7.6%-9.6% reported growth, 7%-9% organic. - CAG Diagnostics recurring revenues expected to grow 8%-10% organically. - 2026 reported operating margin outlook: 32%-32.5%, 30-80 basis points improvement year over year. - EPS outlook: $14.29 to $14.80 per share, 10%-14% comparable growth. - Q1 2026 revenue growth outlook: 11.5%-13.5% reported, 9%-11% organic, with ~2.5% foreign exchange benefit.

Q: Chris Schultz asked about vet visit divergence between wellness and non-wellness visits and price trends.

A: Jay Mazelsky said wellness visits had macro headwinds, non-wellness had green shoots with aging pets, and vet inflation was moderating. Andrew Emerson added on positive visit frequency and diagnostic utilization.

Q: Erin Wright inquired about consumables growth drivers and InVue's impact.

A: Jay Mazelsky said innovation and installed base growth drive consumables, Andrew Emerson mentioned 12% install base expansion and strong Catalyst placements.

Q: Erin Wright asked about Reference Lab growth.

A: Jay Mazelsky said global growth from network investment, innovation, and competitive submissions.

Q: Mike Ryskin asked about innovation contribution and price conversations.

A: Jay Mazelsky talked about innovation's leveraged impact, Andrew Emerson mentioned CancerDx's direct and indirect contributions, and Jay Mazelsky said price conversations weren't big flashpoints.

Q: Jon Block asked about CAG Dx recurring revenue guidance.

A: Andrew Emerson said Q1 guidance was consistent with full-year outlook, factoring in days benefit and clinical visit pressure.

Q: Brandon Vazquez asked about software contributions and utilization.

A: Jay Mazelsky and Andrew Emerson discussed software's strategic importance, Velo's traction, and utilization driven by innovation.

Q: Andrea Alfonso asked about gross margin mix and 2026 margin expansion.

A: Andrew Emerson said Q4 had modest mix pressure but solid gross and operating margin improvement, with 2026 margin improvement driven by gross margin gains.