IDEXX Laboratories, Inc.’s (IDXX) consistent strong performance of the CAG (Companion Animal Group) segment is poised to help it grow in the upcoming quarters. Robust demand for its cloud-based offerings instills optimism, reflecting the company’s focus on improving patient care rather than back-office tasks. Solid performance in the international markets is encouraging. However, unfavorable solvency and the impact of third-party distributors remain our concerns for IDEXX’s operations. In the past year, thi ...

Trading at its most reasonable valuation since 2016, this pet healthcare diagnostics leader could be a once-in-a-decade opportunity today.While the debate over whether it's better to pay for high-quality or high-growth businesses will never end, the easiest solution is to find stocks offering both.One company that fits this best-of-both-worlds billing is Idexx Laboratories (IDXX 0.19%), offering leading pet healthcare diagnostics operations. Delivering annualized revenue and free-cash-flow growth of 10% and ...

Financial Data and Key Metrics Changes - IDEXX reported a 6% organic revenue growth in Q3 2024, with a 7% growth in CAG diagnostic recurring revenues and a 13% growth in the water business [7][10] - EPS for Q3 was $2.80, reflecting an 11% increase as reported and a 12% increase on a comparable basis [9][24] - Operating margins improved to 31.2%, up 110 basis points year-on-year [24] Business Line Data and Key Metrics Changes - CAG organic revenue growth was 6%, supported by 6% growth in veterinary software services and diagnostic imaging revenues, while LPD experienced a 2% organic decline [10][12] - CAG diagnostic recurring revenue increased 7% organically, with a 5% average global net price improvement [12][23] - Consumable revenues increased 11% organically, driven by strong gains in the US and international regions [19] Market Data and Key Metrics Changes - US CAG diagnostic recurring revenue organic growth was 5%, with a 1.5% growth benefit from equivalent days effects [14] - International growth was supported by 10% organic gains, reflecting strong new business gains and high premium instrument placements [13][22] - The US clinical visit growth was constrained by a 2.1% decline in same-store clinical visits, particularly in discretionary wellness visits [15][16] Company Strategy and Development Direction - IDEXX aims to lead the companion animal diagnostics sector through innovation and a high-touch commercial model, focusing on organic growth [33][34] - The company is on track for the launch of the IDEXX inVue Dx Cellular Analyzer in Q4, with nearly 700 pre-orders already secured [43][44] - IDEXX is expanding its corporate account relationships, which are expected to drive long-term volume growth [42][84] Management's Comments on Operating Environment and Future Outlook - Management acknowledged near-term macro pressures affecting clinical visit growth but remains confident in long-term demand drivers for diagnostics [36][62] - The updated full-year organic revenue growth outlook is now 5.3% to 6%, reflecting a reduction due to recent US macro trends [26][27] - Management emphasized the resilience of pet owners in prioritizing pet care despite broader economic pressures [62] Other Important Information - Free cash flow for Q3 was $192 million, with a net income to free cash flow conversion ratio of 91% [25] - The company maintained its outlook for free cash flow conversion of 90% to 95% for the full year [25] - IDEXX's balance sheet remains strong, with leverage ratios of 0.7 times gross and 0.4 times net of cash [26] Q&A Session Summary Question: Can you elaborate on the drivers of the reduction outlook and the step down in Q4? - Management indicated that the 3.5% to 4% growth outlook for CAGDX recurring revenue is net of an estimated 0.5% impact from hurricanes, with normalized growth expected to be 4% to 4.5% [58][59] Question: What is the biggest delta between the underlying outlook given in Q2 versus now? - Management noted that the pressure on end clinic demand was greater than anticipated, contributing to the revised outlook [59][62] Question: Can you expand on the reference lab performance and pricing dynamics? - Management reported 2.4% organic growth in reference labs, with volume growth being positive but moderated by new customer agreements affecting price realization [66][70] Question: How do you view pricing as a lever going forward? - Management confirmed a consistent 5% full-year price outlook, with some moderation expected in Q4 due to new business effects [72][73] Question: Can you discuss the impact of pain medication visits on overall visit trends? - Management clarified that while pain medication visits have increased, they do not typically include diagnostics, leading to a decline in overall diagnostic-related visits [104]

IDEXX Laboratories, Inc. (IDXX) posted third-quarter 2024 earnings per share (EPS) of $2.80, up 10.7% year over year. The figure surpassed the Zacks Consensus Estimate by 4.1%.Comparable constant-currency EPS of $2.79 improved 12% year over year.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Following the earnings announcement, IDXX stock fell 3.1% at the pre-market trading today.IDEXX’s Revenues in DetailQuarterly revenues increased 6.6% year over year (up 6% organically) to $975.5 ...

For the quarter ended September 2024, Idexx Laboratories (IDXX) reported revenue of $975.54 million, up 6.6% over the same period last year. EPS came in at $2.80, compared to $2.53 in the year-ago quarter.The reported revenue represents a surprise of -0.41% over the Zacks Consensus Estimate of $979.59 million. With the consensus EPS estimate being $2.69, the EPS surprise was +4.09%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wal ...

Idexx Laboratories (IDXX) came out with quarterly earnings of $2.80 per share, beating the Zacks Consensus Estimate of $2.69 per share. This compares to earnings of $2.53 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 4.09%. A quarter ago, it was expected that this Animal diagnostic and health care company would post earnings of $2.87 per share when it actually produced earnings of $2.44, delivering a surprise of -14.98%.Over ...

[Third Quarter 2024 Financial Highlights](index=1&type=section&id=Third%20Quarter%202024%20Financial%20Highlights) IDEXX reported strong third-quarter performance with 7% revenue growth and an 11% increase in EPS, driven by robust CAG Diagnostics recurring revenue and operating margin expansion [Q3 2024 Key Performance Metrics](index=1&type=section&id=Q3%202024%20Key%20Performance%20Metrics) IDEXX achieved 7% reported and 6% organic revenue growth in the third quarter, driven by strong performance in CAG Diagnostics recurring revenue. EPS increased by 11% to $2.80, benefiting from a 110 basis point expansion in operating margin Q3 2024 Financial Highlights | Metric | Value | Growth (As Reported) | Growth (Organic/Comparable) | | :--- | :--- | :--- | :--- | | Revenue | $976 million | 7% | 6% | | CAG Diagnostics Recurring Revenue | - | 7% | 7% | | EPS | $2.80 | 11% | 12% | | Operating Margin Expansion | - | 110 bps | 100 bps | - Growth was supported by strong execution, including continued new business gains and double-digit year-over-year growth in the global premium instrument installed base[1](index=1&type=chunk) [Updated 2024 Full-Year Guidance](index=1&type=section&id=Updated%202024%20Full-Year%20Guidance) The company adjusted its 2024 revenue guidance downward by approximately 1% at the midpoint to $3,865 - $3,890 million, citing negative macroeconomic impacts on pet owner visits in the U.S. However, the EPS outlook midpoint was maintained at $10.37 - $10.53, supported by solid operating margin performance and lower projected interest and tax expenses Updated 2024 Full-Year Guidance | Metric | Updated 2024 Guidance | | :--- | :--- | | Revenue | $3,865 million - $3,890 million | | Revenue Growth (Reported) | 5.5% - 6.2% | | Revenue Growth (Organic) | 5.3% - 6.0% | | EPS | $10.37 - $10.53 | - The revenue guidance reduction incorporates expectations for near-term negative impacts from macro and sector conditions that are constraining pet owner visits and demand at U.S. veterinary clinics[2](index=2&type=chunk) [Third Quarter 2024 Performance Analysis](index=2&type=section&id=Third%20Quarter%202024%20Performance%20Analysis) The company's third-quarter performance was driven by strong CAG and Water segment growth, while the LPD segment experienced a decline [Segment Performance](index=2&type=section&id=Segment%20Performance) The Companion Animal Group (CAG) was the primary growth driver with 7% reported revenue growth. The Water segment also showed strong performance, growing 13%. In contrast, the Livestock, Poultry and Dairy (LPD) segment experienced a 3% revenue decline due to weakness in the Asia Pacific region [Companion Animal Group (CAG)](index=2&type=section&id=Companion%20Animal%20Group%20(CAG)) CAG revenue grew 7% as reported and 6% organically, supported by a 7% increase in diagnostics recurring revenue. Growth was strong internationally (10%) and outpaced the sector in the U.S. (5%). IDEXX VetLab consumables were a key contributor with 11% growth, while reference lab services grew more modestly at 2% organically CAG Revenue Growth Breakdown (Q3 2024) | Category | Reported Growth (%) | Organic Growth (%) | | :--- | :--- | :--- | | **Total CAG** | **7%** | **6%** | | CAG Diagnostics Recurring Revenue | 7% | 7% | | - U.S. | 5% | 5% | | - International | 10% | 10% | | IDEXX VetLab Consumables | 11% | 11% | | Reference Lab Services | 3% | 2% | | Rapid Assay Products | 6% | 6% | | Vet Software, Services & Imaging | 11% | 6% | [Water](index=3&type=section&id=Water) The Water segment delivered robust performance, with revenues growing 13% on both a reported and organic basis. This growth was driven by double-digit gains in the U.S. and continued solid growth in Europe - Water revenues grew **13%** as reported and organic, reflecting double-digit gains in the U.S. and solid growth in Europe[12](index=12&type=chunk) [Livestock, Poultry and Dairy (LPD)](index=3&type=section&id=Livestock%2C%20Poultry%20and%20Dairy%20(LPD)) LPD revenues declined by 3% as reported and 2% organically. While the U.S. and global poultry tests showed solid gains, these were more than offset by lower revenues in the Asia Pacific region, particularly from reduced swine testing and herd health screening - LPD revenues declined **3%** as reported (**2%** organic), with gains in U.S. and poultry tests offset by lower Asia Pacific revenues from reduced swine testing[13](index=13&type=chunk) [Profitability Analysis](index=3&type=section&id=Profitability%20Analysis) The company's profitability improved in the third quarter, with gross margin expanding by 120 basis points to 61.1% and operating margin increasing by 110 basis points to 31.2%. Margin expansion was driven by a favorable business mix, particularly high growth in VetLab consumables and software recurring revenues, and lower instrument costs Q3 2024 Profitability Metrics | Metric | Q3 2024 Value | Change (As Reported) | Change (Comparable) | | :--- | :--- | :--- | :--- | | Gross Profit | - | +9% | +9% | | Gross Margin | 61.1% | +120 bps | +140 bps | | Operating Margin | 31.2% | +110 bps | +100 bps | - Operating expense growth of **7%** was driven by higher sales and marketing expenses and increased R&D spending to support the company's growth and innovation initiatives[15](index=15&type=chunk) [2024 Full-Year Financial Outlook](index=3&type=section&id=2024%20Full-Year%20Financial%20Outlook) IDEXX updated its 2024 full-year guidance, adjusting revenue expectations while maintaining its EPS outlook due to offsetting factors [Updated Guidance Details](index=3&type=section&id=Updated%20Guidance%20Details) IDEXX updated its full-year 2024 guidance, reducing the revenue forecast to $3,865 - $3,890 million (5.3% - 6.0% organic growth) due to moderating U.S. clinical visit trends. The operating margin outlook remains consistent at 28.7% - 29.0%. The EPS range was narrowed to $10.37 - $10.53, maintaining the midpoint as the revenue impact was offset by favorable foreign exchange, interest expense, and tax rate estimates 2024 Full-Year Financial Outlook Comparison | Metric | Updated Outlook | Prior Outlook | | :--- | :--- | :--- | | Revenue | $3,865 million - $3,890 million | $3,885 million - $3,945 million | | Organic Growth | 5.3% - 6.0% | 6.2% - 7.8% | | Operating Margin | 28.7% - 29.0% | 28.7% - 29.0% | | EPS | $10.37 - $10.53 | $10.31 - $10.59 | | Comparable EPS Growth | 10% - 11% | 9% - 12% | | Capital Expenditures | ~$160 million | ~$180 million | - The updated guidance includes a **~$15 million** favorable impact from recent foreign exchange estimates[16](index=16&type=chunk) - The full-year operating margin outlook includes a negative impact of **~160 basis points** from a discrete litigation expense accrual[17](index=17&type=chunk) [Foreign Currency Assumptions](index=5&type=section&id=Foreign%20Currency%20Assumptions) The company's 2024 financial outlook is based on updated foreign currency exchange rate assumptions. The net impact of currency is estimated to be favorable by approximately 20 basis points on revenue growth and result in a negative impact of about $0.03 on EPS for the full year 2024 Foreign Currency Exchange Rate Assumptions (vs. USD) | Currency | Assumed Rate | | :--- | :--- | | Euro | $1.08 | | British Pound | $1.29 | | Canadian Dollar | $0.72 | | Australian Dollar | $0.66 | | Japanese Yen | ¥152 | | Chinese Renminbi | ¥7.18 | - Estimated foreign currency exchange rates are expected to have a favorable impact of **~20 bps** on both total revenue growth and CAG Diagnostics recurring revenue growth for 2024[20](index=20&type=chunk) [Financial Statements and Supplementary Data](index=12&type=section&id=Financial%20Statements%20and%20Supplementary%20Data) This section provides detailed financial statements, including the consolidated statement of operations, segment information, balance sheet, and cash flow statement [Condensed Consolidated Statement of Operations](index=12&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations) For the third quarter of 2024, IDEXX reported total revenues of $975.5 million, up from $915.5 million in the prior year. Net income attributable to stockholders increased to $232.8 million, or $2.80 per diluted share, compared to $212.2 million, or $2.53 per diluted share, in Q3 2023 Q3 2024 Statement of Operations Highlights (in thousands) | Line Item | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Revenue | $975,543 | $915,527 | | Gross Profit | $596,038 | $547,982 | | Income from Operations | $303,892 | $275,283 | | Net Income | $232,841 | $212,231 | | Diluted EPS | $2.80 | $2.53 | [Segment Information](index=13&type=section&id=Segment%20Information) In Q3 2024, the Companion Animal Group (CAG) was the largest segment, contributing $892.0 million in revenue and $277.1 million in operating income. The Water segment generated $50.2 million in revenue and $23.6 million in operating income, while the LPD segment had $29.0 million in revenue and $0.9 million in operating income Q3 2024 Revenue and Operating Income by Segment (in thousands) | Segment | Revenue | Income from Operations | | :--- | :--- | :--- | | CAG | $891,990 | $277,082 | | Water | $50,162 | $23,608 | | LPD | $28,992 | $889 | | Other | $4,399 | $2,313 | | **Total** | **$975,543** | **$303,892** | [Revenue Growth Analysis](index=14&type=section&id=Revenue%20Growth%20Analysis) For Q3 2024, total company organic revenue growth was 6.1%, with the U.S. growing 5.2% and International markets growing 7.8%. Within CAG, recurring diagnostics revenue grew 6.7% organically, led by 11.1% growth in IDEXX VetLab consumables. For the nine months ended, total company organic growth was 6.6% Q3 2024 Organic Revenue Growth by Segment and Geography | Category | Organic Revenue Growth (%) | | :--- | :--- | | **Total Company** | **6.1%** | | - United States | 5.2% | | - International | 7.8% | | **CAG Segment** | **6.0%** | | - CAG Diagnostics Recurring | 6.7% | | **Water Segment** | **13.2%** | | **LPD Segment** | **(2.4)%** | [Condensed Consolidated Balance Sheet](index=16&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) As of September 30, 2024, IDEXX had total assets of $3.35 billion, compared to $3.26 billion at the end of 2023. Total stockholders' equity increased to $1.62 billion from $1.48 billion over the same period. Cash and cash equivalents stood at $308.6 million Balance Sheet Highlights (in thousands) | Account | Sept 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $308,636 | $453,932 | | Total current assets | $1,433,744 | $1,495,254 | | Total assets | $3,350,766 | $3,259,925 | | Total current liabilities | $1,009,224 | $951,547 | | Total long-term debt | $524,758 | $622,883 | | Total stockholders' equity | $1,618,054 | $1,484,530 | [Condensed Consolidated Statement of Cash Flows](index=17&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the nine months ended September 30, 2024, net cash provided by operating activities was $667.0 million. The company used $167.2 million in investing activities, primarily for business acquisitions and equipment purchases, and $645.3 million in financing activities, largely due to $591.0 million in common stock repurchases. Free cash flow for the nine-month period was $575.3 million Nine Months 2024 Cash Flow Summary (in thousands) | Category | Nine Months Ended Sept 30, 2024 | | :--- | :--- | | Net cash provided by operating activities | $666,976 | | Net cash used by investing activities | ($167,219) | | Net cash used by financing activities | ($645,291) | | Net (decrease) in cash | ($145,296) | | **Free Cash Flow** | **$575,309** | [Non-GAAP Financial Measures and Other Disclosures](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Other%20Disclosures) This section clarifies the company's use of non-GAAP financial measures and provides details on an ongoing litigation matter [Explanation of Non-GAAP Measures](index=6&type=section&id=Explanation%20of%20Non-GAAP%20Measures) The company uses several non-GAAP financial measures, such as organic revenue growth, constant currency, comparable growth metrics, and free cash flow, to provide supplemental information for evaluating business performance. These measures exclude items like foreign currency impacts, acquisitions, and other non-recurring or unusual items to facilitate period-over-period comparisons - **Organic Revenue Growth:** Represents revenue growth net of impacts from changes in foreign currency exchange rates, business acquisitions, and divestitures[27](index=27&type=chunk) - **Comparable Growth Metrics (e.g., Comparable EPS Growth):** Excludes the impact of foreign currency changes, non-recurring items (like the ongoing litigation matter), and tax benefits from share-based compensation[30](index=30&type=chunk)[32](index=32&type=chunk) - **Free Cash Flow:** Defined as cash generated from operations reduced by investments in property and equipment[36](index=36&type=chunk) [Reconciliation of Non-GAAP Measures](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The report provides detailed reconciliations of GAAP to non-GAAP measures. For Q3 2024, reported EPS of $2.80 reconciles to a comparable EPS of $2.79 after adjustments. Similarly, the 110 bps reported operating margin gain reconciles to a 100 bps comparable gain after excluding currency effects Q3 2024 EPS Reconciliation (GAAP to Comparable) | Description | Per Share Amount | | :--- | :--- | | **Diluted EPS (as reported)** | **$2.80** | | Change from currency | $0.01 | | **Comparable EPS** | **$2.79** | Q3 2024 Operating Margin Reconciliation (GAAP to Comparable) | Description | Margin | Gain | | :--- | :--- | :--- | | **Operating Margin (as reported)** | **31.2%** | **110 bps** | | Change from currency | (0.2%) | (10 bps) | | **Comparable Operating Margin** | **31.0%** | **100 bps** | [Ongoing Litigation Matter](index=11&type=section&id=Ongoing%20Litigation%20Matter) The company is a defendant in an ongoing litigation matter concerning an alleged breach of contract for underpayment of royalty payments. In the second quarter of 2024, the company increased its accrual for this matter by $61.5 million, bringing the total accrual to $89.0 million, which represents its best estimate of the probable loss - The company increased its litigation accrual by **$61.5 million** in Q2 2024, resulting in a total accrual of **$89.0 million** for an ongoing matter related to alleged underpayment of royalties[38](index=38&type=chunk)[39](index=39&type=chunk)

In its upcoming report, Idexx Laboratories (IDXX) is predicted by Wall Street analysts to post quarterly earnings of $2.69 per share, reflecting an increase of 6.3% compared to the same period last year. Revenues are forecasted to be $979.05 million, representing a year-over-year increase of 6.9%. Over the last 30 days, there has been a downward revision of 0.1% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration of th ...

Core Viewpoint - IDEXX Laboratories, Inc. is expected to report its third-quarter 2024 results on October 31, with revenue estimates indicating a 7% year-over-year increase to $979.3 million and EPS expected to rise by 6.3% to $2.69 [1][2]. Group 1: Earnings Performance - In the last reported quarter, IDEXX posted adjusted EPS of $2.44, missing the Zacks Consensus Estimate by 14.98% [1]. - The company has beaten earnings estimates in three of the last four quarters, with an average surprise of 1.51% [1]. Group 2: Revenue Estimates - The Zacks Consensus Estimate for third-quarter 2024 revenues is $979.3 million, reflecting a 7% increase from the previous year [2]. - The Water segment is projected to see an 8% year-over-year revenue improvement, while the Livestock, Poultry, and Dairy segment is expected to have a modest 0.1% increase [10][11]. Group 3: Factors Influencing Performance - The Companion Animal Group (CAG) is anticipated to benefit from improved global net prices and international organic growth, supported by strong execution of strategies [4]. - Diagnostic utilization per clinical visit is expected to have expanded, contributing to higher diagnostic revenue [5]. - IDEXX VetLab consumables are likely to show strong organic growth, driven by performance in the U.S. and international markets [6]. Group 4: Market Dynamics - The U.S. CAG Diagnostics' recurring revenues are expected to be bolstered by new business gains and high customer retention levels [5]. - Global lab revenues are anticipated to surge due to strong U.S. performance and growth in international regions [8]. - The veterinary software and diagnostic imaging revenues are expected to benefit from the recent acquisition of Greenline software and data platform [8].

It has been about a month since the last earnings report for Idexx Laboratories (IDXX) . Shares have added about 0.9% in that time frame, underperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Idexx due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. IDEXX Misses Q2 Earnings Estimates, Narro ...