The launch of the Catalyst® Pancreatic Lipase Test demonstrates IDEXX's Technology for Life strategy and will provide veterinarians with quantitative results at the point-of-care in less than 10 minutes WESTBROOK, Maine, June 4, 2024 /PRNewswire/ -- IDEXX Laboratories, Inc. (NASDAQ: IDXX), a global leader in pet healthcare innovation, announces the launch of the Catalyst® Pancreatic Lipase Test, a single-slide solution for canine and feline patients suspected of pancreatitis. With the innovative load-and-go ...

Core Insights - IDEXX Laboratories (IDXX) is currently facing challenges due to complex macroeconomic conditions and unfavorable currency movements, resulting in a Zacks Rank 4 (Sell) [1] Economic and Operational Challenges - Global macroeconomic factors such as geopolitical complexities, supply chain disruptions, and healthcare staff shortages are negatively impacting IDEXX's operations [2] - The ongoing war in Ukraine has further complicated IDEXX's supply chain, and sustained inflation may hinder the company's ability to manage costs effectively [2] Financial Performance - In Q1 2024, IDEXX experienced a significant 31.3% increase in general and administrative expenses, while U.S. clinical visit growth was softer than expected due to staffing challenges and macroeconomic pressures [3] - Approximately 21% of IDEXX's total revenues in 2023 came from products sold internationally in local currencies, leading to a negative impact on revenues and profits due to the strengthening U.S. dollar [4] - Foreign exchange fluctuations reduced operating profits by $25 million and earnings per share (EPS) by 24 cents in 2023 [4] - The recent appreciation of the U.S. dollar is expected to impact 2024 revenue forecasts by $35 million, equating to about a 1% decrease [5] Growth Strategies - IDEXX is focusing on enhancing its global commercial capabilities to sustain strong recurring revenue growth in CAG Diagnostics, with notable 12% organic growth in international CAG diagnostic recurring revenues in Q1 2024 [6] - The company has expanded its operations in the U.S. for the first time in four years, complementing seven international expansions since 2021 [6] Diagnostic Services - Diagnostics remain a rapidly growing area for IDEXX, providing advanced capabilities that meet diverse veterinary needs through various modalities, generating both recurring and non-recurring revenues [7]

Revenue Performance - Total Company revenue for the three months ended March 31, 2024, was $964.1 million, representing a 7.1% increase from $900.2 million in the same period of 2023[137]. - The Companion Animal Group (CAG) revenue increased by 7.5% to $889.3 million, with organic revenue growth of 7.2% driven by higher volumes and realized prices[137]. - Water segment revenue grew by 10.8% to $43.1 million, with organic revenue growth of 10.6% attributed to price increases and higher volumes in the U.S. and international markets[137]. - Livestock, Poultry, and Dairy (LPD) segment revenue decreased by 3.4% to $28.2 million, with a decline in diagnostic test volumes in China partially offset by higher prices in the U.S. and Europe[137]. - U.S. revenue for the total company was $631.0 million, a 6.9% increase from $590.4 million, while international revenue rose by 7.5% to $333.1 million[137]. - Organic revenue growth for the same period was 6.8%, driven by growth in CAG Diagnostics recurring revenue and higher volumes globally[138]. Profitability - Gross profit increased to $593.1 million, with a gross profit margin of 61.5%, up from 60.3% in the prior year, due to a favorable sales mix and lower instrument costs[140]. - Gross profit for the CAG segment rose to $546,236 thousand, representing a gross profit margin of 61.4%, up from 60.3% in the previous year[150]. - CAG Diagnostics recurring revenue grew by 7.3% to $780,144 thousand, driven by higher realized prices and volumes[144][145]. - IDEXX VetLab consumables revenue increased by 8.9% to $316,929 thousand, supported by an expanded installed base and test menu[144][146]. Operating Expenses - Operating expenses rose to $294.1 million, representing 30.5% of revenue, with significant increases in general and administrative expenses by 31.3%[140]. - Operating expenses for the CAG segment totaled $266,540 thousand, an increase of 12.5% compared to $237,007 thousand in 2023[150]. - Total operating expenses across segments increased due to higher personnel-related costs and project expenses, with significant increases in general and administrative expenses[151][155][159]. Cash Flow and Investments - Cash and cash equivalents decreased to $397.4 million as of March 31, 2024, from $453.9 million as of December 31, 2023[167]. - Net cash provided by operating activities increased by $14.7 million to $198.6 million in Q1 2024 compared to Q1 2023[171]. - Cash used in investing activities rose to $106.9 million in Q1 2024 from $39.5 million in Q1 2023, mainly due to the acquisition of a software business[173]. - Total capital expenditure outlook for 2024 is approximately $180 million, focusing on growth in manufacturing and customer-facing software development[174]. - Cash used in financing activities was $144.1 million in Q1 2024, a slight decrease from $146.1 million in Q1 2023, attributed to no net borrowings under the Credit Facility this year[175]. Debt and Financial Ratios - The gross debt to Adjusted EBITDA ratio was 0.73 as of March 31, 2024, indicating strong leverage management[183]. - The company had $998.5 million of remaining borrowing availability under its $1.25 billion Credit Facility as of March 31, 2024[166]. - The total debt as of March 31, 2024, was $945,776,000, with a gross debt to Adjusted EBITDA ratio of 0.73[183]. - The net debt was reported at $553,317,000, resulting in a net debt to Adjusted EBITDA ratio of 0.42[183]. - The company was in compliance with its financial covenant, which requires a consolidated leverage ratio not to exceed 3.5-to-1[183]. Future Outlook - Future outlook includes expectations for continued growth in CAG Diagnostics and Water segments, with ongoing investments in research and development[138]. - The company anticipates continued growth in recurring revenue streams and demand for subscription-based software in the CAG segment[138]. - Future performance may be influenced by macroeconomic conditions, including geopolitical instability and supply chain challenges[121].

Fortune.com recently reported that artificial intelligence (AI) is helping the pet care industry cope with a chronic veterinary shortage. AI use cases could become far more prevalent for pets than humans in the near term due to fewer impediments such as privacy laws. That’s excellent news for AI pet stocks. Indeed, animal health innovation is accelerating in 2024. As an investor, it pays to be aware of trends in this consistently growing industry. The pet sector came into its own during the pandemic. Now po ...

Financial Data and Key Metrics Changes - IDEXX reported a 7% organic revenue growth in Q1 2024, with overall revenues increasing by 7% organically, supported by a 7% organic growth in CAG Diagnostic recurring revenues [4][19] - Gross profit increased by 9% in Q1, with gross margins at 61.5%, up 110 basis points on a comparable basis [24] - EPS was $2.81 per share in Q1, reflecting a 10% increase as reported and a 9% increase on a comparable basis [25][51] Business Line Data and Key Metrics Changes - CAG Diagnostic recurring revenue grew 7% organically in Q1, with veterinary software and diagnostic imaging revenues increasing by 12% as reported [53][22] - CAG instrument revenue increased by 3% organically, building on high prior year placement levels [7] - Water revenues increased by 11% organically, driven by double-digit gains in the US and Europe [57] Market Data and Key Metrics Changes - US CAG Diagnostic recurring revenue organic growth was 6.5% in Q1, while clinical visit growth levels in the US were estimated to have declined by 2.3% overall [54][9] - International CAG Diagnostic recurring revenue organic growth was 9%, reflecting benefits from net price realization and solid volume gains [20] - Solid gains in the US and Europe were moderated by lower Asia Pacific revenues, particularly in herd health screening revenues related to reduced China import testing [11] Company Strategy and Development Direction - IDEXX's strategy focuses on driving the development of the companion animal diagnostics sector through innovation and customer engagement [66][67] - The company aims to leverage its robust innovation agenda and high-touch customer-centered commercial model to support long-term sector growth [67] - IDEXX continues to expand its diagnostics and software solutions globally, with a focus on increasing adoption of its point-of-care innovations [36][39] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing staffing challenges at veterinary clinics and potential pressure on US consumers from broader macro impacts [9][55] - The company expects organic revenue growth results to benefit from equivalent days effects in H2 2024, with a full-year organic growth outlook of 7% to 9% [28][29] - Management remains confident in IDEXX's ability to execute and drive continued solid organic revenue growth despite near-term sector trends [55][70] Other Important Information - The company updated its full-year guidance for reported revenues to $3.895 billion to $3.965 billion, reflecting a reduction of $55 million at midpoint [27] - Free cash flow was $168 million in Q1, with a net income to free cash flow conversion ratio of 92% on a trailing 12-month basis [59] - IDEXX allocated $155 million in capital to share repurchases in the first quarter [26] Q&A Session Summary Question: Can you elaborate on the macro impacts affecting vet visit trends? - Management noted that clinical visits were softer than expected in the US, with a decline of about 1.5% versus the prior year, attributed to ongoing staffing challenges and potential consumer impacts [111][112] Question: How does April's traffic compare to the first quarter's trends? - Management indicated that April's trends were expected to align with the Q1 decline, but they anticipate some improvement in traffic levels over the balance of the year [116] Question: What are the dynamics of pricing and consumer sensitivity? - Management acknowledged that while pet owners prioritize spending on healthcare services, there may be some sensitivity to pricing due to cumulative macro impacts [131][132] Question: How is IDEXX positioned to gain market share amid industry changes? - Management expressed confidence in IDEXX's ability to grow and deliver strong financial performance, leveraging its innovation and customer engagement strategies [123][143]

IDEXX Laboratories, Inc. (IDXX) posted first-quarter 2024 earnings per share (EPS) of $2.81, up 10.2% year over year. The figure surpassed the Zacks Consensus Estimate by 4.9%.In the first quarter of 2024, comparable constant-currency EPS of $2.71 improved 8.8% year over year.Revenues in DetailFirst-quarter revenues increased 7.1% year over year (7% organically) to $964.1 million. However, the metric missed the Zacks Consensus Estimate by 0.1%.The year-over-year upside was primarily driven by the 7% reporte ...

For the quarter ended March 2024, Idexx Laboratories (IDXX) reported revenue of $964.1 million, up 7.1% over the same period last year. EPS came in at $2.81, compared to $2.55 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $965.43 million, representing a surprise of -0.14%. The company delivered an EPS surprise of +4.85%, with the consensus EPS estimate being $2.68.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- an ...

Idexx Laboratories (IDXX) came out with quarterly earnings of $2.81 per share, beating the Zacks Consensus Estimate of $2.68 per share. This compares to earnings of $2.55 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 4.85%. A quarter ago, it was expected that this Animal diagnostic and health care company would post earnings of $2.12 per share when it actually produced earnings of $2.32, delivering a surprise of 9.43%.Over t ...

[First Quarter 2024 Financial Results](index=1&type=section&id=First%20Quarter%202024%20Financial%20Results) IDEXX reported **$964 million** revenue and **$2.81** diluted EPS for Q1 2024, with strong CAG and Water segment growth, despite a slight full-year guidance reduction due to FX impacts [First Quarter Highlights](index=1&type=section&id=First%20Quarter%20Highlights) IDEXX achieved **$964 million** revenue and **$2.81** diluted EPS in Q1 2024, driven by strong CAG and Water segment performance, while updating full-year guidance due to FX Q1 2024 Key Financial Metrics | Metric | Value | Growth (Reported) | Growth (Organic/Comparable) | | :--- | :--- | :--- | :--- | | **Revenue** | $964 million | 7% | 7% | | **CAG Revenue** | - | 7% | 7% | | **CAG Diagnostics Recurring Revenue** | - | 7% | 7% | | **EPS (Diluted)** | $2.81 | 10% | 9% | - Growth was supported by strong execution, including an **11% annual increase** in the global premium instrument installed base and high customer retention[3](index=3&type=chunk) - Operating margin contracted by **10 basis points**, which includes a significant negative impact of **~180 basis points** from lapping a customer contract resolution payment in Q1 2023[4](index=4&type=chunk) [Performance by Business Segment](index=2&type=section&id=Performance%20by%20Business%20Segment) CAG led growth with **7% organic increase**, outperforming U.S. clinical visits, while Water segment also grew **11% organically**, and LPD declined **3%** due to Asia Pacific screening reductions [Companion Animal Group (CAG)](index=2&type=section&id=Companion%20Animal%20Group%20(CAG)) - CAG revenue grew **7%** as reported and organic, with U.S. CAG Diagnostics recurring revenue growing **6.5%**, which was **~900 basis points** above U.S. same-store clinical visit growth[7](index=7&type=chunk) CAG Revenue Growth by Category (Q1 2024) | Category | Reported Growth | Organic Growth | | :--- | :--- | :--- | | **IDEXX VetLab consumables** | 9% | 9% | | **Reference laboratory services** | 7% | 6% | | **Rapid assay products** | 5% | 5% | | **Veterinary software, services & imaging** | 12% | 8% | [Water](index=3&type=section&id=Water) - Water segment revenue grew **11%** as reported and organic, reflecting solid gains across regions and benefits from year-end order shipment timing[11](index=11&type=chunk) [Livestock, Poultry and Dairy (LPD)](index=3&type=section&id=Livestock,%20Poultry%20and%20Dairy%20(LPD)) - LPD revenue declined **3%** as reported and organic. Gains in the U.S. and Europe were more than offset by lower revenues in the Asia Pacific region, partly due to reduced herd health screening[12](index=12&type=chunk) [Profitability Analysis](index=3&type=section&id=Profitability%20Analysis) Gross margin improved to **61.5%** due to favorable mix and lower costs, but operating margin slightly contracted to **31.0%** due to a prior-year contract payment and increased R&D - Gross profit increased by **9%**, with gross margin expanding by **120 basis points to 61.5%**, supported by business mix and lower costs[13](index=13&type=chunk) - Operating margin was **31.0%**, a **10 basis point decrease**, including a **~180 basis point negative impact** from lapping a customer contract resolution payment in Q1 2023[14](index=14&type=chunk) - Operating expense growth of **12%** was driven by higher R&D spending on innovation and new platform development, as well as the impact of the prior-year customer contract payment[14](index=14&type=chunk) [2024 Full-Year Financial Outlook](index=4&type=section&id=2024%20Full-Year%20Financial%20Outlook) IDEXX lowered its 2024 revenue outlook to **$3,895-$3,965 million** and EPS to **$10.82-$11.20**, primarily due to adverse foreign exchange impacts and moderating U.S. clinical visit trends 2024 Full-Year Outlook Comparison (in millions for Revenue, in dollars for EPS) | Metric | Updated Outlook | Prior Outlook | | :--- | :--- | :--- | | **Revenue** | $3,895 - $3,965 M | $3,930 - $4,040 M | | **Reported Revenue Growth** | 6.5% - 8.5% | 7.5% - 10.5% | | **Organic Revenue Growth** | 7% - 9% | 7% - 10% | | **Operating Margin** | 30.2% - 30.7% | 30.2% - 30.7% | | **EPS** | $10.82 - $11.20 | $10.84 - $11.33 | | **Reported EPS Growth** | 8% - 11% | 8% - 13% | - The updated outlook includes a **$35 million negative revenue impact** from the strengthening U.S. dollar and a **1% reduction** to the high end of the organic revenue growth range to reflect moderating U.S. clinical visit trends[16](index=16&type=chunk) - The EPS outlook reduction was mitigated by sustained expectations for operating margin improvement and favorable adjustments to projected net interest expense (now **~$21 million** vs. **~$27 million** prior)[18](index=18&type=chunk)[19](index=19&type=chunk) [Foreign Currency Impact](index=6&type=section&id=Foreign%20Currency%20Impact) Foreign currency changes are expected to negatively impact full-year 2024 results, reducing total revenue growth by **~100 basis points** and EPS by **~$0.09** Estimated Foreign Currency Exchange Rate Impacts on 2024 Outlook (in bps for growth rates, in dollars for EPS) | Metric | Estimated Impact | | :--- | :--- | | Revenue growth rate | (~100bps) | | CAG Diagnostics recurring revenue growth rate | (~100bps) | | Operating margin growth | ~ 0 bps | | EPS | (~$0.09) | | EPS growth rate | (~1%) | [Financial Statements and Supplementary Data](index=8&type=section&id=Financial%20Statements%20and%20Supplementary%20Data) [Consolidated Financial Statements](index=11&type=section&id=Consolidated%20Financial%20Statements) Unaudited Q1 2024 statements show **7.1%** revenue growth to **$964.1 million**, **10.1%** net income increase to **$235.6 million**, and total assets growing to **$3.35 billion** [Statement of Operations](index=11&type=section&id=Statement%20of%20Operations) Condensed Consolidated Statement of Operations (in thousands) | Account | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Revenue** | $964,095 | $900,195 | | **Gross Profit** | $593,070 | $542,971 | | **Income from Operations** | $298,958 | $280,399 | | **Net Income** | $235,579 | $214,054 | | **Diluted EPS** | $2.81 | $2.55 | [Balance Sheet](index=14&type=section&id=Balance%20Sheet) Condensed Consolidated Balance Sheet (in thousands) | Account | March 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $397,433 | $453,932 | | **Total current assets** | $1,501,973 | $1,495,254 | | **Total assets** | $3,353,515 | $3,259,925 | | **Total current liabilities** | $956,902 | $951,547 | | **Total liabilities** | $1,784,609 | $1,775,395 | | **Total stockholders' equity** | $1,568,906 | $1,484,530 | [Statement of Cash Flows](index=15&type=section&id=Statement%20of%20Cash%20Flows) Condensed Consolidated Statement of Cash Flows (in thousands) | Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $198,585 | $183,912 | | **Net cash used by investing activities** | ($106,944) | ($39,511) | | **Net cash used by financing activities** | ($144,074) | ($146,081) | | **Net decrease in cash** | ($56,499) | ($1,179) | - Free cash flow for the quarter was **$168.3 million**, an increase from **$144.4 million** in the prior year period[48](index=48&type=chunk) [Segment and Revenue Analysis](index=12&type=section&id=Segment%20and%20Revenue%20Analysis) CAG remains the largest segment at **$889.3 million** revenue, with Water and CAG showing strong organic growth, while international markets slightly outpaced U.S. growth Q1 2024 Revenue and Gross Profit by Segment (in thousands) | Segment | Revenue | Gross Profit | Gross Margin % | | :--- | :--- | :--- | :--- | | **CAG** | $889,285 | $546,236 | 61.4% | | **Water** | $43,071 | $30,497 | 70.8% | | **LPD** | $28,205 | $15,234 | 54.0% | | **Total** | $964,095 | $593,070 | 61.5% | Q1 2024 Organic Revenue Growth by Segment and Geography | Segment/Geography | Organic Revenue Growth | | :--- | :--- | | **CAG** | 7.2% | | **Water** | 10.6% | | **LPD** | (3.3)% | | **Total Company** | **6.8%** | | **United States** | 6.5% | | **International** | 7.5% | - Within CAG, recurring revenue from veterinary software, services, and diagnostic imaging systems grew **11.2% organically**, driven by high demand for cloud-based software[42](index=42&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) The company uses non-GAAP measures like 'organic revenue growth' and 'comparable EPS growth' to provide clearer business performance insights, with reconciliations to GAAP equivalents - Organic revenue growth is a non-GAAP measure that excludes the impact of changes in foreign currency exchange rates and certain acquisitions/divestitures to facilitate easier period-over-period comparisons[29](index=29&type=chunk) - Comparable EPS growth is a non-GAAP measure that excludes currency impacts, tax benefits from share-based compensation, and other non-recurring items to better reflect fundamental business performance[34](index=34&type=chunk) Q1 2024 EPS Reconciliation (Diluted, in dollars) | Item | Per Share Amount | | :--- | :--- | | **Reported EPS** | **$2.81** | | Less: Share-based compensation tax benefit | $0.10 | | Less: Change from currency | $0.00 | | **Comparable EPS** | **$2.71** | [Shareholder Activities](index=16&type=section&id=Shareholder%20Activities) IDEXX repurchased **321,000 shares** of common stock for **$177.3 million** during Q1 2024, primarily through open market transactions Q1 2024 Common Stock Repurchases (in thousands) | Category | Shares (thousands) | Cost (thousands) | | :--- | :--- | :--- | | Open market repurchases | 303 | $167,102 | | Employee surrenders for tax | 18 | $10,189 | | **Total** | **321** | **$177,291** | [Corporate Information and Disclosures](index=6&type=section&id=Corporate%20Information%20and%20Disclosures) [Conference Call and Annual Meeting](index=6&type=section&id=Conference%20Call%20and%20Annual%20Meeting) The company announced its Q1 2024 earnings conference call for May 1, 2024, and a virtual 2024 Annual Meeting of Shareholders on May 6, 2024 - A conference call to discuss Q1 2024 results was scheduled for May 1, 2024, at 8:30 a.m. (EDT)[22](index=22&type=chunk) - The 2024 Annual Meeting of Shareholders will be held virtually on Monday, May 6, 2024, at 4:30 p.m. (EDT)[23](index=23&type=chunk) [Forward-Looking Statements and Non-GAAP Measures](index=7&type=section&id=Forward-Looking%20Statements%20and%20Non-GAAP%20Measures) This section cautions that forward-looking statements are subject to risks and explains the use of non-GAAP financial measures as supplemental information, not substitutes for GAAP results - The report contains forward-looking statements, including the 2024 financial outlook, which are not guarantees of future performance and are subject to known and unknown risks[26](index=26&type=chunk) - The company uses non-GAAP financial measures to supplement GAAP results, believing they provide useful information for evaluating business performance and comparing it to peers[27](index=27&type=chunk)

Analysts on Wall Street project that Idexx Laboratories (IDXX) will announce quarterly earnings of $2.68 per share in its forthcoming report, representing an increase of 5.1% year over year. Revenues are projected to reach $966.4 million, increasing 7.4% from the same quarter last year.The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This represents how the covering analysts, as a whole, have reassessed their initial estimates during this timeframe.Before a company an ...