Group 1: Zacks Premium Overview - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates on Zacks Rank and Industry Rank, access to the Zacks 1 Rank List, Equity Research reports, and Premium stock screens [1] - The service also includes Zacks Style Scores, which are designed to help investors identify stocks with the best potential to outperform the market in the short term [2] Group 2: Zacks Style Scores - Zacks Style Scores consist of four categories: Value Score, Growth Score, Momentum Score, and VGM Score, each providing insights into different investment strategies [3][4][5][6] - The Value Score focuses on identifying undervalued stocks using financial ratios, while the Growth Score emphasizes a company's financial health and future growth potential [3][4] - The Momentum Score helps investors capitalize on price trends, and the VGM Score combines all three styles to highlight stocks with the best overall characteristics [5][6] Group 3: Zacks Rank and Performance - The Zacks Rank is a proprietary model that uses earnings estimate revisions to assist in stock selection, with 1 (Strong Buy) stocks achieving an average annual return of +23.75% since 1988, significantly outperforming the S&P 500 [7][8] - There are over 800 stocks rated as 1 or 2, making it essential for investors to utilize Style Scores to narrow down their choices [9][10] Group 4: Stock Highlight - IDEXX Laboratories - IDEXX Laboratories, Inc. is a company focused on products and services for veterinary, livestock, water testing, and human diagnostics markets, currently holding a 3 (Hold) Zacks Rank with a VGM Score of B [12] - The company has a Momentum Style Score of A, with shares increasing by 15.1% in the past four weeks, and analysts have raised earnings estimates for fiscal 2025 [13] - The Zacks Consensus Estimate for IDEXX's earnings has risen by $0.39 to $12.55 per share, indicating a positive outlook for the company [13]

Summary of IDEXX Laboratories (IDXX) 2025 Investor Day Company Overview - IDEXX Laboratories is focused on the pet health care industry, emphasizing innovation and customer-centric solutions to enhance veterinary diagnostics and care [1][2][8][89]. Key Industry Insights - The pet population in the U.S. has increased by 12% from 2020 to 2022, leading to a rise in demand for veterinary services as pets age and require more health care [92][94]. - Average lifespans of pets have increased by nearly two years since 2020, resulting in a 22% increase in diagnostic spending over a pet's lifetime [96]. - There is a significant opportunity in feline health care, as only 30% of cats visited a veterinarian last year compared to 70% of dogs, indicating a need for improved care and diagnostics for cats [97][98]. Core Business Strategies - IDEXX's business model is built on a durable recurring revenue stream, with over 80% of total revenue coming from diagnostics and related services [10][88]. - The company is committed to innovation across various dimensions, including point of care, reference lab services, and customer-facing software [8][21]. - IDEXX aims to increase diagnostics utilization through education and partnerships with veterinary practices, focusing on best practices and standards [15][16][20]. Financial Performance and Growth Opportunities - The company sees a long-term growth opportunity exceeding $45 billion, with a projected growth rate of over 10% [7][86][88]. - IDEXX's investment in R&D is substantial, with a focus on developing integrated solutions that address both clinical and business challenges faced by veterinarians [22][23][24]. Innovations and Product Development - IDEXX has introduced new diagnostic tests, including canine lymphoma and mast cell tumor detection, which are expected to enhance the diagnostic capabilities of veterinary practices [34][39][40]. - The company is expanding its cancer diagnostics panel and aims to include additional tests by 2026, addressing a significant market need [39][42]. Customer Engagement and Software Solutions - IDEXX is developing a vertical SaaS technology stack tailored for animal health, which integrates various applications to optimize veterinary workflows [64][68]. - The company emphasizes the importance of customer relationships and frequent engagement to drive diagnostics usage and improve practice performance [70][72]. Market Trends and Future Outlook - The aging pet population and rising expectations for pet care are expected to drive demand for diagnostics and veterinary services [100][101]. - IDEXX is well-positioned to capitalize on these trends by providing innovative solutions and supporting veterinary practices in meeting the evolving needs of pet owners [86][88]. Conclusion - IDEXX Laboratories is strategically positioned to leverage significant growth opportunities in the pet health care sector through innovation, customer engagement, and a strong focus on diagnostics [88][89].

IDEXX Laboratories, Inc. Investor Day August 15, 2024 Innovation-Driven Growth Strategy Jay Mazelsky President and Chief Executive Officer Spider & Shu Shu 2024 IDEXX Investor Day Agenda | Time Topic | | Length | | --- | --- | --- | | 8:00 – 8:05 am Welcome and | Introductions | 5 min | |  | Jay Mazelsky, President and Chief Executive Officer | | | 8:05 – 9:10 am | IDEXX Opportunity and Strategy | | |  Jay Mazelsky – | Innovation-Driven Growth Strategy | 45 min | |  Tina Hunt, PhD – | Strategy and Sector ...

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong candidates can be challenging due to inherent risks and volatility [1] Group 1: Company Overview - Idexx Laboratories (IDXX) is highlighted as a recommended growth stock with a favorable Growth Score and a top Zacks Rank [2] - The company operates in the animal diagnostic and health care sector, which is currently experiencing promising growth opportunities [3] Group 2: Earnings Growth - Idexx has a historical EPS growth rate of 12.5%, with projected EPS growth of 16.6% this year, surpassing the industry average of 12.4% [5] - Earnings growth is a critical factor for growth investors, as double-digit growth is often seen as indicative of strong future prospects [4] Group 3: Cash Flow Growth - The year-over-year cash flow growth for Idexx is currently at 6%, significantly higher than the industry average of -2.6% [6] - Over the past 3-5 years, Idexx has maintained an annualized cash flow growth rate of 14.6%, compared to the industry average of 6.3% [7] Group 4: Earnings Estimate Revisions - The current-year earnings estimates for Idexx have been revised upward, with the Zacks Consensus Estimate increasing by 3.8% over the past month [9] - Positive trends in earnings estimate revisions are correlated with near-term stock price movements, indicating strong potential for Idexx [8] Group 5: Investment Positioning - Idexx has achieved a Growth Score of A and a Zacks Rank of 2, positioning it well for potential outperformance in the growth stock category [10][11]

Company Overview - IDEXX Laboratories, Inc. is a developer, manufacturer, and distributor of products and services primarily for the companion animal veterinary, livestock and poultry, water testing, and dairy markets [12] - The company also sells portable electrolytes and blood gas analyzers for human point-of-care medical diagnostics [12] Investment Ratings - IDEXX is currently rated as a 3 (Hold) on the Zacks Rank, with a VGM Score of B [12] - The stock has a Momentum Style Score of A, indicating strong upward price trends [13] Performance Metrics - IDEXX shares have increased by 19.1% over the past four weeks [13] - For fiscal 2025, four analysts have revised their earnings estimates upwards in the last 60 days, with the Zacks Consensus Estimate increasing by $0.23 to $12.39 per share [13] - The company boasts an average earnings surprise of +6.1% [13] Investment Considerations - With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, IDEXX is recommended for investors' short lists [13]

[PART I—FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and related notes for the interim period [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents IDEXX Laboratories' unaudited condensed consolidated financial statements and detailed explanatory notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The Condensed Consolidated Balance Sheets present the company's financial position as of June 30, 2025, compared to December 31, 2024 | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------- | :----------------------------- | :------------------------------- | | Total Assets | $3,330,794 | $3,293,443 | | Total Liabilities | $1,871,967 | $1,698,130 | | Total Stockholders' Equity | $1,458,827 | $1,595,313 | - Total assets increased by **$37.35 million**, while total liabilities increased by **$173.837 million**, and total stockholders' equity decreased by **$136.486 million** from December 31, 2024, to June 30, 2025[10](index=10&type=chunk) [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The Condensed Consolidated Statements of Income present the company's financial performance for the three and six months ended June 30, 2025, and 2024 | Metric (in thousands, except EPS) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Revenue | $1,109,457 | $1,003,578 | $2,107,884 | $1,967,673 | | Gross Profit | $694,732 | $619,159 | $1,318,111 | $1,212,229 | | Income from Operations | $373,046 | $263,801 | $689,580 | $562,759 | | Net Income | $293,989 | $203,298 | $536,666 | $438,877 | | Diluted EPS | $3.63 | $2.44 | $6.59 | $5.24 | - For the three months ended June 30, 2025, total revenue increased by **10.6% YoY**, net income increased by **44.6% YoY**, and diluted EPS increased by **48.8% YoY**. For the six months ended June 30, 2025, total revenue increased by **7.1% YoY**, net income increased by **22.3% YoY**, and diluted EPS increased by **25.8% YoY**[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) The Condensed Consolidated Statements of Comprehensive Income detail net income and other comprehensive income components for the three and six months ended June 30, 2025, and 2024 | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Income | $293,989 | $203,298 | $536,666 | $438,877 | | Other Comprehensive Income (Loss), net of tax | $13,141 | $(4,784) | $16,695 | $(13,975) | | Comprehensive Income | $307,130 | $198,514 | $553,361 | $424,902 | - Other comprehensive income significantly improved, moving from a loss of **$4.784 million** in Q2 2024 to a gain of **$13.141 million** in Q2 2025, primarily driven by foreign currency translation adjustments[14](index=14&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This statement outlines changes in stockholders' equity for the six months ended June 30, 2025, and 2024, reflecting net income and share repurchases | Metric (in thousands) | Balance December 31, 2024 | Balance June 30, 2025 | | :-------------------- | :------------------------ | :-------------------- | | Total Stockholders' Equity | $1,595,313 | $1,458,827 | | Net Income | N/A | $536,666 | | Repurchases of Common Stock, net | N/A | $(743,758) | - Total stockholders' equity decreased from **$1,595.313 million** at December 31, 2024, to **$1,458.827 million** at June 30, 2025, primarily due to significant common stock repurchases totaling **$743.758 million**, partially offset by net income[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The Condensed Consolidated Statements of Cash Flows detail cash generated from or used in operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | | Net Cash Provided by Operating Activities | $423,705 | $446,897 | | Net Cash Used by Investing Activities | $(63,238) | $(139,851) | | Net Cash Used by Financing Activities | $(495,952) | $(354,312) | | Net Decrease in Cash and Cash Equivalents | $(123,672) | $(52,342) | | Cash and Cash Equivalents at End of Period | $164,594 | $401,590 | - Net cash provided by operating activities decreased by **$23.192 million YoY**. Net cash used by financing activities significantly increased by **$141.640 million**, primarily due to higher common stock repurchases and senior note payments. This led to a larger net decrease in cash and cash equivalents of **$123.672 million** in the current period[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes provide detailed explanations and disclosures for the condensed consolidated financial statements, covering accounting policies, revenue, debt, and segment reporting [NOTE 1. BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION](index=9&type=section&id=NOTE%201.%20BASIS%20OF%20PRESENTATION%20AND%20PRINCIPLES%20OF%20CONSOLIDATION) This note clarifies that the unaudited condensed consolidated financial statements adhere to U.S. GAAP and include consolidated subsidiaries - The financial statements are unaudited and prepared in accordance with U.S. GAAP for interim financial information and Regulation S-X, Rule 10-01[22](index=22&type=chunk) - The company consolidates all wholly-owned and majority-owned subsidiaries, eliminating intercompany transactions[23](index=23&type=chunk) [NOTE 2. ACCOUNTING POLICIES](index=9&type=section&id=NOTE%202.%20ACCOUNTING%20POLICIES) This note details significant accounting policies, including consistency with the 2024 Annual Report and updates on new accounting pronouncements - Adopted ASU 2023-07, "Segment Reporting," as of December 31, 2024, which did not materially impact consolidated financial statements[27](index=27&type=chunk) - Evaluating ASU 2024-03, "Disaggregation of Income Statement Expenses," effective for fiscal years beginning after December 15, 2026, to determine its impact[28](index=28&type=chunk) - Evaluating ASU 2023-09, "Income Taxes," effective for annual periods beginning after December 15, 2024, for its impact on consolidated financial statements[29](index=29&type=chunk) [NOTE 3. REVENUE](index=10&type=section&id=NOTE%203.%20REVENUE) This note provides disaggregated revenue information by product, service, and geographic area, detailing accounting for multi-performance obligation contracts Revenue by Major Product and Service Categories (in thousands) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | CAG Diagnostics recurring revenue | $877,995 | $808,454 | $1,684,262 | $1,588,598 | | CAG Diagnostics capital - instruments | $58,600 | $35,292 | $90,594 | $69,384 | | Veterinary software, services and diagnostic imaging systems | $85,848 | $78,552 | $167,423 | $153,601 | | Water segment revenue | $51,001 | $46,726 | $96,322 | $89,797 | | LPD segment revenue | $31,762 | $30,306 | $60,358 | $58,511 | | Other segment revenue | $4,251 | $4,248 | $8,925 | $7,782 | | **Total revenue** | **$1,109,457** | **$1,003,578** | **$2,107,884** | **$1,967,673** | Revenue by Principal Geographic Area (in thousands) | Geographic Area | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | United States | $717,869 | $660,146 | $1,372,730 | $1,291,155 | | Europe, Middle East and Africa | $233,271 | $200,689 | $437,818 | $400,520 | | Asia Pacific Region | $89,298 | $80,435 | $171,031 | $156,739 | | Canada | $46,691 | $40,992 | $83,991 | $77,703 | | Latin America & Caribbean | $22,328 | $21,316 | $42,314 | $41,556 | | **Total revenue** | **$1,109,457** | **$1,003,578** | **$2,107,884** | **$1,967,673** | - Contract assets, net, were **$274.8 million** as of June 30, 2025, up from **$246.3 million** on December 31, 2024, reflecting new placements under commitment arrangements[36](index=36&type=chunk) - Capitalized consideration paid to customers was **$217.7 million** as of June 30, 2025, up from **$196.6 million** on December 31, 2024[38](index=38&type=chunk) - Future revenues related to multi-year customer commitment arrangements are estimated at approximately **$4.7 billion**[42](index=42&type=chunk) [NOTE 4. ACQUISITIONS, ASSET PURCHASES AND INVESTMENTS](index=13&type=section&id=NOTE%204.%20ACQUISITIONS%2C%20ASSET%20PURCHASES%20AND%20INVESTMENTS) This note details the company's acquisition strategy and a Q1 2024 software and data platform acquisition for **$81.1 million** - In Q1 2024, IDEXX acquired a U.S.-based software and data platform business for approximately **$81.1 million**, including a contingent payment of **$4.4 million**[51](index=51&type=chunk) - The acquisition resulted in **$45.8 million** in goodwill, representing synergies with the software business, and is expected to be tax deductible[51](index=51&type=chunk) [NOTE 5. SHARE-BASED COMPENSATION](index=14&type=section&id=NOTE%205.%20SHARE-BASED%20COMPENSATION) This note details share-based compensation, including fair value of awards, unrecognized expense, and option valuation assumptions Share-Based Compensation Expenses (in thousands) | Period | 2025 | 2024 | | :----- | :--- | :--- | | 3 Months Ended June 30 | $14,900 | $15,700 | | 6 Months Ended June 30 | $29,500 | $30,100 | - Total unrecognized compensation expense for unvested share-based awards was **$94.7 million** as of June 30, 2025, to be recognized over approximately 1.7 years[52](index=52&type=chunk) Weighted Average Valuation Assumptions for Option Awards | Assumption | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------ | :--------------------------- | :--------------------------- | | Expected stock price volatility | 33% | 32% | | Expected term, in years | 7.3 | 7.0 | | Risk-free interest rate | 4.5% | 4.3% | | Weighted average fair value of options granted | $206.58 | $239.64 | [NOTE 6. CREDIT LOSSES](index=14&type=section&id=NOTE%206.%20CREDIT%20LOSSES) This note discusses the company's exposure to credit losses and allowances for uncollectible receivables Allowance for Credit Losses (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Accounts Receivable | $12,200 | $12,600 | | Contract Assets and Lease Receivables | $7,600 | $6,800 | - As of June 30, 2025, approximately **88%** of accounts receivable had not yet reached the invoice due date, indicating strong payment performance[58](index=58&type=chunk) [NOTE 7. INVENTORIES](index=15&type=section&id=NOTE%207.%20INVENTORIES) This note provides a breakdown of inventory components, valued at the lower of cost (FIFO) or net realizable value Inventory Components (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Raw materials | $104,061 | $104,195 | | Work-in-process | $35,111 | $31,907 | | Finished goods | $253,412 | $245,775 | | **Total Inventories** | **$392,584** | **$381,877** | - Total inventories increased by **$10.707 million** from December 31, 2024, to June 30, 2025, primarily driven by an increase in finished goods and work-in-process[60](index=60&type=chunk) [NOTE 8. LEASE COMMITMENTS](index=15&type=section&id=NOTE%208.%20LEASE%20COMMITMENTS) This note details the maturities of operating lease liabilities and supplemental cash flow information related to leases Maturities of Operating Lease Liabilities (in thousands) | Year | Amount (in thousands) | | :-------------------- | :----- | | 2025 (remainder of year) | $14,493 | | 2026 | $32,735 | | 2027 | $27,271 | | 2028 | $21,004 | | 2029 | $16,903 | | Thereafter | $42,678 | | **Total lease payments** | **$155,084** | Supplemental Cash Flow Information for Leases (in thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------------------------- | :--------------------------- | :--------------------------- | | Cash paid for operating lease liabilities | $16,125 | $13,700 | | Right-of-use assets obtained, net of early terminations | $22,602 | $17,137 | [NOTE 9. OTHER CURRENT AND LONG-TERM ASSETS](index=16&type=section&id=NOTE%209.%20OTHER%20CURRENT%20AND%20LONG-TERM%20ASSETS) This note provides a breakdown of other current and long-term assets, including contract assets and equity investments Other Current Assets (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Contract assets, net | $67,908 | $60,751 | | Consideration paid to customers | $66,690 | $61,653 | | Prepaid expenses | $46,221 | $58,626 | | Taxes receivable | $34,995 | $26,990 | | Other assets | $28,802 | $48,159 | | **Total other current assets** | **$244,616** | **$256,179** | Other Long-Term Assets (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Contract assets, net | $206,881 | $185,506 | | Consideration paid to customers | $151,026 | $134,896 | | Deferred income taxes | $125,021 | $125,630 | | Equity investments | $31,004 | $31,004 | | Investments in long-term product supply arrangements | $27,298 | $26,714 | | Other assets | $39,535 | $43,768 | | **Total other long-term assets** | **$580,765** | **$547,518** | [NOTE 10. ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES](index=16&type=section&id=NOTE%2010.%20ACCOUNTS%20PAYABLE%2C%20ACCRUED%20LIABILITIES%20AND%20OTHER%20LONG-TERM%20LIABILITIES) This note details components of accounts payable, accrued liabilities, and other long-term liabilities, including supplier financing Accrued Liabilities (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Accrued employee compensation and related expenses | $140,920 | $174,583 | | Accrued expenses | $90,045 | $165,550 | | Accrued customer incentives and refund obligations | $84,970 | $78,195 | | Accrued taxes | $75,214 | $62,252 | | Current lease liabilities | $25,828 | $21,539 | | **Total accrued liabilities** | **$416,977** | **$502,119** | Other Long-Term Liabilities (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Accrued taxes | $14,112 | $20,898 | | Other accrued long-term expenses | $42,676 | $23,443 | | **Total other long-term liabilities** | **$56,788** | **$44,341** | [NOTE 11. DEBT](index=17&type=section&id=NOTE%2011.%20DEBT) This note details the company's Credit Facility and Senior Notes, including outstanding borrowings, interest rates, and covenants - As of June 30, 2025, IDEXX had **$579.0 million** in outstanding borrowings under its **$1.25 billion** Credit Facility, with **$669.1 million** remaining borrowing availability[68](index=68&type=chunk) - The weighted average effective interest rate on total outstanding borrowings under the Credit Facility was **5.3%** at June 30, 2025[68](index=68&type=chunk) Outstanding Unsecured Senior Notes (Principal Amount in thousands) | Issue Date | Due Date | Series | Principal Amount (in thousands) | Coupon Rate | | :--------- | :--------- | :-------------------- | :--------------- | :---------- | | 12/11/2013 | 12/11/2025 | 2025 Series B Notes | $75,000 | 4.04% | | 9/4/2014 | 9/4/2026 | 2026 Senior Notes | $75,000 | 3.72% | | 2/12/2015 | 2/12/2027 | 2027 Series B Notes | $75,000 | 3.72% | | 3/14/2019 | 3/14/2029 | 2029 Series C Notes | $100,000 | 4.19% | | 4/2/2020 | 4/2/2030 | MetLife 2030 Series D Notes | $125,000 | 2.50% | | 4/14/2020 | 4/14/2030 | Prudential 2030 Series D Notes | $75,000 | 2.50% | - On June 18, 2025, the company repaid its 2025 Series C Notes for **€88.9 million** (US**$103.4 million**) at maturity[71](index=71&type=chunk) [NOTE 12. REPURCHASES OF COMMON STOCK](index=18&type=section&id=NOTE%2012.%20REPURCHASES%20OF%20COMMON%20STOCK) This note summarizes the company's common stock repurchase activities, including open market repurchases and employee share surrenders Common Stock Repurchases (in thousands, except per share amounts) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total shares repurchased | 715 | 415 | 1,660 | 736 | | Total cost of shares | $328,500 | $208,248 | $743,839 | $385,539 | | Average cost per share - total | $459.10 | $501.44 | $448.07 | $523.26 | - The company repurchased significantly more shares in the first six months of 2025 (**1.66 million** shares for **$743.8 million**) compared to the same period in 2024 (**0.736 million** shares for **$385.5 million**)[74](index=74&type=chunk) [NOTE 13. INCOME TAXES](index=19&type=section&id=NOTE%2013.%20INCOME%20TAXES) This note discusses the company's effective income tax rates and influencing factors like share-based compensation and tax audit resolutions Effective Income Tax Rates | Period | 2025 | 2024 | | :-------------------- | :--- | :--- | | 3 Months Ended June 30 | 18.9% | 21.5% | | 6 Months Ended June 30 | 20.2% | 20.9% | - The decrease in the effective tax rate for both the three and six months ended June 30, 2025, was primarily due to increased tax benefits from share-based compensation and the resolution of international tax audits[75](index=75&type=chunk) - Cash paid for income taxes, net of refunds, was **$137.4 million** for the six months ended June 30, 2025, up from **$90.9 million** in the prior year[76](index=76&type=chunk) [NOTE 14. ACCUMULATED OTHER COMPREHENSIVE INCOME](index=19&type=section&id=NOTE%2014.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME) This note details changes in Accumulated Other Comprehensive Income (AOCI), net of tax, including hedging and defined benefit plans Changes in AOCI (in thousands) for Six Months Ended June 30, 2025 | Component | Balance Dec 31, 2024 (in thousands) | Other comprehensive (loss) income before reclassifications (in thousands) | Reclassified from AOCI (in thousands) | Balance June 30, 2025 (in thousands) | | :------------------------------------ | :------------------- | :------------------------------------------------------- | :--------------------- | :-------------------- | | Foreign Currency Exchange Contracts | $12,785 | $(19,609) | $(1,817) | $(8,641) | | Interest Rate Swap | $542 | $234 | $(504) | $272 | | Euro Denominated Notes | $6,451 | $(8,958) | — | $(2,507) | | Cross Currency Swaps | $7,409 | $(14,047) | — | $(6,638) | | Defined Benefit Plans, Net of Tax | $(3,908) | — | $247 | $(3,661) | | Cumulative Translation Adjustment | $(116,924) | $61,149 | — | $(55,775) | | **Total** | **$(93,645)** | **$18,769** | **$(2,074)** | **$(76,950)** | - AOCI improved from a loss of **$93.645 million** at December 31, 2024, to a loss of **$76.950 million** at June 30, 2025, primarily due to positive foreign currency translation adjustments[77](index=77&type=chunk) [NOTE 15. EARNINGS PER SHARE](index=20&type=section&id=NOTE%2015.%20EARNINGS%20PER%20SHARE) This note reconciles weighted average shares outstanding for basic and diluted EPS, including anti-dilutive awards and options Weighted Average Shares Outstanding (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Shares outstanding for basic EPS | 80,413 | 82,630 | 80,864 | 82,863 | | Dilutive effect of share-based payment awards | 581 | 763 | 601 | 821 | | **Shares outstanding for diluted EPS** | **80,994** | **83,393** | **81,465** | **83,684** | Anti-Dilutive Awards and Options (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Weighted average number of shares underlying anti-dilutive awards | 35 | 70 | 1 | 53 | | Weighted average number of shares underlying anti-dilutive options | 587 | 474 | 563 | 440 | [NOTE 16. COMMITMENTS, CONTINGENCIES AND GUARANTEES](index=21&type=section&id=NOTE%2016.%20COMMITMENTS%2C%20CONTINGENCIES%20AND%20GUARANTEES) This note outlines the company's commitments, contingencies, and guarantees, including legal proceedings and indemnification - On April 17, 2025, the company paid an **$80 million** judgment to conclude a litigation matter that was accrued in prior years[84](index=84&type=chunk) - The company accrues for loss contingencies when probable and estimable, and as of June 30, 2025, accruals for actual and threatened litigation were not material[83](index=83&type=chunk) - The fair value of potential indemnification obligations under agreements with third parties is believed to be minimal, with no liabilities recognized as of June 30, 2025[86](index=86&type=chunk) [NOTE 17. SEGMENT REPORTING](index=22&type=section&id=NOTE%2017.%20SEGMENT%20REPORTING) This note provides financial information for the company's three reportable segments: CAG, Water, and LPD, plus 'Other' activities - IDEXX operates through three reportable segments: Companion Animal Group (CAG), Water quality products (Water), and Livestock, Poultry and Dairy (LPD)[88](index=88&type=chunk) Segment Revenues (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | CAG | $1,022,443 | $922,298 | $1,942,279 | $1,811,583 | | Water | $51,001 | $46,726 | $96,322 | $89,797 | | LPD | $31,762 | $30,306 | $60,358 | $58,511 | | Other | $4,251 | $4,248 | $8,925 | $7,782 | | **Total Consolidated Revenue** | **$1,109,457** | **$1,003,578** | **$2,107,884** | **$1,967,673** | Segment Gross Profit (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | CAG | $642,102 | $569,071 | $1,216,925 | $1,115,307 | | Water | $35,511 | $32,074 | $67,584 | $62,571 | | LPD | $14,929 | $15,558 | $29,294 | $30,792 | | **Total Segment Gross Profit** | **$692,542** | **$616,703** | **$1,313,803** | **$1,208,670** | [NOTE 18. FAIR VALUE MEASUREMENTS](index=25&type=section&id=NOTE%2018.%20FAIR%20VALUE%20MEASUREMENTS) This note describes the company's fair value measurements for financial assets and liabilities, categorized by a three-level hierarchy - Fair value measurements are classified into a three-level hierarchy (Level 1: quoted prices in active markets, Level 2: observable inputs other than Level 1, Level 3: unobservable inputs)[96](index=96&type=chunk)[102](index=102&type=chunk) Assets and Liabilities Measured at Fair Value (in thousands) | Category | Level | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------ | :---- | :------------ | :---------------- | | Money market funds | 1 | $7,508 | $139,626 | | Foreign currency exchange contracts | 2 | $698 | $16,921 | | Interest rate swap | 2 | $356 | $710 | | Cross currency swaps (Liabilities) | 2 | $15,019 | $33 | | Foreign currency exchange contracts (Liabilities) | 2 | $12,355 | — | | Contingent consideration (Liabilities) | 3 | $1,500 | $2,300 | - The estimated fair value of long-term debt was **$511.9 million** as of June 30, 2025, compared to its carrying value of **$525.0 million**[101](index=101&type=chunk) [NOTE 19. HEDGING INSTRUMENTS](index=26&type=section&id=NOTE%2019.%20HEDGING%20INSTRUMENTS) This note provides transparency on the company's use of derivative and non-derivative instruments for hedging foreign currency and interest rate risk - IDEXX uses foreign currency exchange contracts and an interest rate swap as cash flow hedges to reduce exposure to variability in cash flows[113](index=113&type=chunk) - The company targets hedging approximately **75% to 85%** of estimated exposure from intercompany product purchases and sales in major foreign currencies[116](index=116&type=chunk) - Euro-denominated notes and cross currency swap contracts are designated as net investment hedges to offset foreign currency translation gains and losses on net investments in foreign subsidiaries[118](index=118&type=chunk)[119](index=119&type=chunk) Fair Values of Hedging Instruments (in thousands) | Instrument | Classification | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------ | :-------------------- | :------------ | :---------------- | | Foreign currency exchange contracts (Assets) | Other current assets | $698 | $16,921 | | Interest rate swap contract (Assets) | Other current assets | $356 | $710 | | Foreign currency exchange contracts (Liabilities) | Accrued liabilities | $9,663 | — | | Cross currency swaps (Liabilities) | Other long-term liabilities | $15,019 | $33 | | Foreign currency denominated debt (Liabilities) | Short-term debt | — | $92,803 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition, operations, and cash flows, including business overview, accounting estimates, and segment performance [Business Overview](index=30&type=section&id=Business%20Overview) IDEXX develops and distributes products and services for companion animal, livestock, poultry, dairy, and water testing sectors - IDEXX operates through three primary segments: Companion Animal Group (CAG), Water quality products (Water), and Livestock, Poultry and Dairy (LPD)[128](index=128&type=chunk) - Key products and services include point-of-care veterinary diagnostics, reference laboratory services, practice management software, and water microbiology testing[129](index=129&type=chunk) [Currency Impact, Tariff and Trade Policies, U.S. Tax Law Changes, and Other Items](index=31&type=section&id=Currency%20Impact%2C%20Tariff%20and%20Trade%20Policies%2C%20U.S.%20Tax%20Law%20Changes%2C%20and%20Other%20Items) This section discusses external factors impacting the company, including foreign currency, tariff policies, and the new U.S. tax law - Approximately **35%** of overall revenues for the year ended December 31, 2024, were from international sales, making the company susceptible to foreign currency exchange rate fluctuations[132](index=132&type=chunk) - Changes in U.S. and other countries' tariff and trade policies could adversely affect business, financial condition, and operating results by increasing costs or decreasing profit margins[133](index=133&type=chunk)[134](index=134&type=chunk) - The company is evaluating the impact of the recently signed U.S. tax law, the "One Big Beautiful Bill Act" (OBBBA), on its financial statements and results of operations[135](index=135&type=chunk) [Critical Accounting Estimates and Assumptions](index=31&type=section&id=Critical%20Accounting%20Estimates%20and%20Assumptions) Financial statements require management estimates and judgments affecting reported amounts, consistent with the 2024 Annual Report - Financial statements require estimates and judgments affecting reported assets, liabilities, revenues, and expenses, consistent with the 2024 Annual Report[137](index=137&type=chunk) [Recent Accounting Pronouncements](index=32&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 2 for information on recent accounting standards and their impact on financial statements - Refer to Note 2 for details on recent accounting standards and their impact on financial statements[138](index=138&type=chunk) [Non-GAAP Financial Measures](index=32&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures like organic revenue growth, segment income, and Adjusted EBITDA for investor analysis - Organic revenue growth is a non-GAAP measure that excludes the effects of foreign currency exchange rates and certain business acquisitions/divestitures to show underlying business trends[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) - Segment income from operations is a non-GAAP measure that adjusts for foreign currency transaction gains and losses, which are centrally managed[142](index=142&type=chunk) - Other non-GAAP measures include Adjusted EBITDA, gross debt, net debt, gross debt to Adjusted EBITDA ratio, and net debt to Adjusted EBITDA ratio, used to evaluate business performance[143](index=143&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance for the three and six months ended June 30, 2025, by total company and operating segments [Three Months Ended June 30, 2025, Compared to Three Months Ended June 30, 2024](index=34&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%2C%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202024) For Q2 2025, total revenue grew **10.6%** (**9.3% organic**), driven by CAG Diagnostics, with improved gross profit margin and lower operating expenses Total Company Revenue Growth (3 Months Ended June 30) | Segment | 2025 Revenue (in thousands) | Reported Revenue Growth | Organic Revenue Growth | | :-------------------- | :-------------------------- | :---------------------- | :--------------------- | | CAG | $1,022,443 | 10.9% | 9.7% | | Water | $51,001 | 9.1% | 8.4% | | LPD | $31,762 | 4.8% | 2.6% | | Other | $4,251 | 0.1% | 0.1% | | **Total Company** | **$1,109,457** | **10.6%** | **9.3%** | - Total Company revenue increased by **10.6%** (**9.3% organic**) to **$1,109.457 million**, driven by CAG Diagnostics recurring revenue and IDEXX inVue Dx Analyzer placements[145](index=145&type=chunk)[147](index=147&type=chunk) - Gross profit increased by **12.2%** to **$694.732 million**, with a **90 basis point** increase in gross profit margin to **62.6%**, reflecting higher consumable volume, productivity, and net price realization[148](index=148&type=chunk) - Income from operations increased by **41.4%** to **$373.046 million**, primarily due to a **$61.5 million** decrease in general and administrative expense related to a prior-year litigation matter[148](index=148&type=chunk)[149](index=149&type=chunk) [Total Company (Three Months)](index=34&type=section&id=Total%20Company%20(Three%20Months)) Total Company revenue grew **10.6%** (**9.3% organic**) to **$1,109.457 million**, with gross profit up **12.2%** and operating income up **41.4%** Total Company Results of Operations (3 Months Ended June 30, in thousands) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change Amount (in thousands) | Percentage Change | | :-------------------- | :----------- | :----------- | :------------ | :---------------- | | Revenues | $1,109,457 | $1,003,578 | $105,879 | 10.6% | | Cost of revenue | $414,725 | $384,419 | $30,306 | 7.9% | | Gross profit | $694,732 | $619,159 | $75,573 | 12.2% | | Income from operations | $373,046 | $263,801 | $109,245 | 41.4% | - Gross profit margin increased by **90 basis points** to **62.6%**, driven by higher IDEXX VetLab consumable volume, productivity improvements, and net price realization[148](index=148&type=chunk) - General and administrative expense decreased by **$58.562 million**, primarily due to a **$61.5 million** litigation expense in the prior year[149](index=149&type=chunk) [Companion Animal Group (Three Months)](index=36&type=section&id=Companion%20Animal%20Group%20(Three%20Months)) CAG revenue increased **10.9%** (**9.7% organic**) to **$1,022.443 million**, driven by VetLab consumables and inVue Dx Analyzer placements CAG Revenue by Category (3 Months Ended June 30, in thousands) | Category | 2025 Revenue (in thousands) | Reported Growth | Organic Growth | | :------------------------------------ | :----------- | :-------------- | :------------- | | CAG Diagnostics recurring revenue | $877,995 | 8.6% | 7.4% | | IDEXX VetLab consumables | $375,112 | 15.3% | 13.6% | | Rapid assay products | $100,240 | (3.0%) | (3.3%) | | Reference laboratory diagnostic and consulting services | $367,694 | 5.9% | 4.8% | | CAG Diagnostics capital - instruments | $58,600 | 66.0% | 62.5% | | Veterinary software, services and diagnostic imaging systems | $85,848 | 9.3% | 9.2% | - IDEXX VetLab consumables revenue increased by **15.3%** (**13.6% organic**) due to higher test volumes and price realization, supported by **10%** growth in the active installed base of premium instruments[153](index=153&type=chunk) - CAG Diagnostics capital - instrument revenue surged by **66.0%** (**62.5% organic**), primarily driven by placements of the new IDEXX inVue Dx Analyzer[157](index=157&type=chunk) - Segment gross profit margin increased by **110 basis points** to **62.8%**, and segment income from operations grew by **44.3%** to **$348.477 million**[159](index=159&type=chunk) [Water (Three Months)](index=38&type=section&id=Water%20(Three%20Months)) Water segment revenue increased **9.1%** (**8.4% organic**) to **$51.001 million**, with gross profit margin up **100 basis points** and operating income up **20.2%** - Water segment revenue increased by **9.1%** (**8.4% organic**) to **$51.001 million**, due to higher realized prices and increased testing volumes, especially in Europe and Asia Pacific[161](index=161&type=chunk) - Gross profit margin for the Water segment increased by **100 basis points** to **69.6%**, mainly due to higher realized prices and lower product costs[162](index=162&type=chunk) - Segment income from operations for Water grew by **20.2%** to **$24.642 million**[161](index=161&type=chunk) [Livestock, Poultry and Dairy (Three Months)](index=39&type=section&id=Livestock%2C%20Poultry%20and%20Dairy%20(Three%20Months)) LPD segment revenue increased **4.8%** (**2.6% organic**) to **$31.762 million**, but gross profit decreased **4.0%** due to margin decline, resulting in an operating loss - LPD segment revenue increased by **4.8%** (**2.6% organic**) to **$31.762 million**, primarily from higher realized prices and increased test volumes in Asia Pacific and North America[165](index=165&type=chunk) - Gross profit decreased by **4.0%** to **$14.929 million**, with a **430 basis point** decrease in gross profit margin to **47.0%**, mainly due to higher product and related costs[166](index=166&type=chunk) - The LPD segment reported an income from operations loss of **$0.505 million**, a **133.7%** decrease from the prior year's profit[165](index=165&type=chunk) [Other (Three Months)](index=40&type=section&id=Other%20(Three%20Months)) Other segment revenue remained flat at **$4.251 million**, gross profit decreased **10.8%**, but operating income increased **74.2%** due to lower foreign currency losses - Other segment revenue was **$4.251 million**, a slight increase of **0.1%**, with higher sales volumes of OPTI Medical consumables and instruments offset by lower royalty revenue[169](index=169&type=chunk) - Gross profit decreased by **10.8%** to **$2.190 million**, with a **630 basis point** decrease in gross profit margin to **51.5%**, largely due to higher product and freight costs[170](index=170&type=chunk) - Other income from operations increased by **74.2%** to **$0.432 million**, primarily due to lower foreign currency transaction losses[169](index=169&type=chunk)[171](index=171&type=chunk) [Non-Operating Items (Three Months)](index=40&type=section&id=Non-Operating%20Items%20(Three%20Months)) Interest expense increased to **$11.3 million**, interest income decreased to **$0.6 million**, and the effective income tax rate decreased to **18.9%** - Interest expense increased to **$11.3 million** (from **$8.1 million** in 2024) due to higher average debt levels and interest rates[172](index=172&type=chunk) - Interest income decreased to **$0.6 million** (from **$3.4 million** in 2024) due to a decrease in money market investments[172](index=172&type=chunk) - The effective income tax rate decreased to **18.9%** (from **21.5%** in 2024), primarily due to increased tax benefits from share-based compensation and international tax audit resolutions[173](index=173&type=chunk) [Six Months Ended June 30, 2025, Compared to Six Months Ended June 30, 2024](index=41&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%2C%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202024) For H1 2025, total revenue grew **7.1%** (**7.1% organic**), driven by CAG Diagnostics, with improved gross profit margin and lower operating expenses Total Company Revenue Growth (6 Months Ended June 30) | Segment | 2025 Revenue (in thousands) | Reported Revenue Growth | Organic Revenue Growth | | :-------------------- | :-------------------------- | :---------------------- | :--------------------- | | CAG | $1,942,279 | 7.2% | 7.1% | | Water | $96,322 | 7.3% | 7.9% | | LPD | $60,358 | 3.2% | 3.4% | | Other | $8,925 | 14.7% | 14.7% | | **Total Company** | **$2,107,884** | **7.1%** | **7.1%** | - Total Company revenue increased by **7.1%** (**7.1% organic**) to **$2,107.884 million**, primarily from CAG Diagnostics recurring revenue and IDEXX inVue Dx Analyzer placements[174](index=174&type=chunk)[175](index=175&type=chunk) - Gross profit increased by **8.7%** to **$1,318.111 million**, with a **90 basis point** increase in gross profit margin to **62.5%**, reflecting higher consumable volume, favorable instrument mix, and net price realization[176](index=176&type=chunk) - Income from operations increased by **22.5%** to **$689.580 million**, mainly due to a **$61.5 million** litigation expense in the prior year, partially offset by a **$9 million** reduction in accrued expense in the current period[176](index=176&type=chunk)[177](index=177&type=chunk) [Total Company (Six Months)](index=41&type=section&id=Total%20Company%20(Six%20Months)) Total Company revenue grew **7.1%** (**7.1% organic**) to **$2,107.884 million**, with gross profit up **8.7%** and operating income up **22.5%** Total Company Results of Operations (6 Months Ended June 30, in thousands) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change Amount (in thousands) | Percentage Change | | :-------------------- | :----------- | :----------- | :------------ | :---------------- | | Revenues | $2,107,884 | $1,967,673 | $140,211 | 7.1% | | Cost of revenue | $789,773 | $755,444 | $34,329 | 4.5% | | Gross profit | $1,318,111 | $1,212,229 | $105,882 | 8.7% | | Income from operations | $689,580 | $562,759 | $126,821 | 22.5% | - Gross profit margin increased by **90 basis points** to **62.5%**, driven by higher IDEXX VetLab consumable volume, favorable instrument placement mix, and net price realization[176](index=176&type=chunk) - General and administrative expense decreased by **$59.025 million**, primarily due to a **$61.5 million** litigation expense in the prior year, partially offset by a **$9 million** reduction in accrued expense in the current period[177](index=177&type=chunk) [Companion Animal Group (Six Months)](index=43&type=section&id=Companion%20Animal%20Group%20(Six%20Months)) CAG revenue increased **7.2%** (**7.1% organic**) to **$1,942.279 million**, driven by VetLab consumables and inVue Dx Analyzer placements CAG Revenue by Category (6 Months Ended June 30, in thousands) | Category | 2025 Revenue (in thousands) | Reported Growth | Organic Growth | | :------------------------------------ | :----------- | :-------------- | :------------- | | CAG Diagnostics recurring revenue | $1,684,262 | 6.0% | 6.0% | | IDEXX VetLab consumables | $719,891 | 12.1% | 12.1% | | Rapid assay products | $184,274 | (2.8%) | (2.7%) | | Reference laboratory diagnostic and consulting services | $712,100 | 2.9% | 2.9% | | CAG Diagnostics capital - instruments | $90,594 | 30.6% | 30.1% | | Veterinary software, services and diagnostic imaging systems | $167,423 | 9.0% | 8.3% | - IDEXX VetLab consumables revenue increased by **12.1%** (**12.1% organic**) due to higher volume and price realization, supported by **10%** growth in the active installed base of premium instruments[182](index=182&type=chunk) - CAG Diagnostics capital - instrument revenue increased by **30.6%** (**30.1% organic**), primarily due to placements of the new IDEXX inVue Dx Analyzer[186](index=186&type=chunk) - Segment gross profit margin increased by **110 basis points** to **62.7%**, and segment income from operations grew by **23.5%** to **$643.632 million**[188](index=188&type=chunk) [Water (Six Months)](index=45&type=section&id=Water%20(Six%20Months)) Water segment revenue increased **7.3%** (**7.9% organic**) to **$96.322 million**, with gross profit margin up **50 basis points** and operating income up **13.8%** - Water segment revenue increased by **7.3%** (**7.9% organic**) to **$96.322 million**, due to higher realized prices and increased testing volumes, especially in Europe and Asia Pacific[190](index=190&type=chunk) - Gross profit margin for the Water segment increased by **50 basis points** to **70.2%**, mainly due to higher realized prices, partially offset by higher product costs[191](index=191&type=chunk) - Segment income from operations for Water grew by **13.8%** to **$45.459 million**[190](index=190&type=chunk) [Livestock, Poultry and Dairy (Six Months)](index=46&type=section&id=Livestock%2C%20Poultry%20and%20Dairy%20(Six%20Months)) LPD segment revenue increased **3.2%** (**3.4% organic**) to **$60.358 million**, but gross profit decreased **4.9%** due to margin decline, resulting in an operating loss - LPD segment revenue increased by **3.2%** (**3.4% organic**) to **$60.358 million**, primarily from higher realized prices and increased test volumes in the Americas and Asia Pacific[194](index=194&type=chunk) - Gross profit decreased by **4.9%** to **$29.294 million**, with a **410 basis point** decrease in gross profit margin to **48.5%**, mainly due to higher product and related costs[195](index=195&type=chunk) - The LPD segment reported an income from operations loss of **$0.380 million**, a **116.1%** decrease from the prior year's profit[194](index=194&type=chunk) [Other (Six Months)](index=47&type=section&id=Other%20(Six%20Months)) Other segment revenue increased **14.7%** to **$8.925 million**, gross profit increased **21.0%** with improved margin, and operating income shifted from loss to profit - Other segment revenue increased by **14.7%** to **$8.925 million**, primarily due to higher sales volumes of OPTI Medical consumables and instruments[198](index=198&type=chunk) - Gross profit increased by **21.0%** to **$4.308 million**, with a **260 basis point** increase in gross profit margin to **48.3%**, largely due to lower product costs[199](index=199&type=chunk) - Other income from operations improved significantly from a loss of **$0.786 million** in 2024 to a profit of **$0.869 million** in 2025, primarily due to lower foreign currency transaction losses[198](index=198&type=chunk)[200](index=200&type=chunk) [Non-Operating Items (Six Months)](index=47&type=section&id=Non-Operating%20Items%20(Six%20Months)) Interest expense increased to **$19.0 million**, interest income decreased to **$1.8 million**, and the effective income tax rate decreased to **20.2%** - Interest expense increased to **$19.0 million** (from **$16.0 million** in 2024) due to higher average debt levels and interest rates[201](index=201&type=chunk) - Interest income decreased to **$1.8 million** (from **$7.8 million** in 2024) due to a decrease in money market investments[201](index=201&type=chunk) - The effective income tax rate decreased to **20.2%** (from **20.9%** in 2024), primarily driven by the resolution of international tax audits[202](index=202&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) The company funds operations via cash, operating cash flows, and Credit Facility; working capital decreased to **$138.5 million** due to lower cash and higher borrowings - Working capital decreased to **$138.5 million** as of June 30, 2025, from **$332.0 million** at December 31, 2024, due to lower cash balances and higher Credit Facility borrowings[203](index=203&type=chunk) - Cash and cash equivalents were **$164.6 million** at June 30, 2025, with **$669.1 million** remaining borrowing availability under the **$1.25 billion** Credit Facility[203](index=203&type=chunk) Cash and Cash Equivalents (in thousands) | Location | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------- | :------------ | :---------------- | | U.S. | $18,555 | $145,118 | | Foreign | $146,039 | $143,148 | | **Total** | **$164,594** | **$288,266** | - Net cash provided by operating activities for the six months ended June 30, 2025, was **$423.7 million**, a decrease of **$23.2 million YoY**, primarily due to an **$80 million** litigation payment and higher tax payments[208](index=208&type=chunk) - Cash used by financing activities increased to **$496.0 million**, mainly due to **$739.0 million** in common stock repurchases and a **$103.4 million** senior note payment, partially offset by **$329.0 million** in net Credit Facility borrowings[213](index=213&type=chunk) - The company anticipates paying off its **$250.0 million** term loan (due October 2025) and **$75.0 million** 2025 Series B Notes (due December 2025) using available cash, Credit Facility borrowings, or new note issuances[215](index=215&type=chunk)[216](index=216&type=chunk) Consolidated Leverage Ratio Calculation (Twelve Months Ended June 30, 2025, in thousands) | Metric | Amount (in thousands) | | :------------------------------------ | :------------- | | Adjusted EBITDA | $1,459,233 | | Total debt | $1,103,806 | | Gross debt | $1,105,787 | | Gross debt to Adjusted EBITDA ratio | 0.76 | | Net debt | $941,193 | | Net debt to Adjusted EBITDA ratio | 0.64 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses market risks, including foreign currency exchange rates, interest rate risk, and inflation, and their impact on revenues and profits - Approximately **22%** of consolidated revenue for the three and six months ended June 30, 2025, was derived from products manufactured in the U.S. and sold internationally in local currencies[224](index=224&type=chunk) Estimated Foreign Currency Exchange Impact (in thousands, except per share amounts) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue increase (decrease) | $12,454 | $(7,109) | $201 | $(6,862) | | Operating profit increase (decrease) - compared to prior period | $3,022 | $(2,613) | $(1,066) | $(2,816) | | Diluted EPS increase (decrease) - compared to prior period | $0.03 | $(0.02) | $(0.01) | $(0.02) | - A **1%** strengthening of the U.S. dollar is projected to reduce revenue by approximately **$8 million** and operating income by approximately **$3 million** for the remainder of 2025, net of hedge positions[226](index=226&type=chunk) - The company uses an interest rate swap to fix the variable interest rate on **$250.0 million** of Credit Facility borrowings at **3.9%** through October 20, 2025, to manage interest rate risk[227](index=227&type=chunk) - Inflationary pressures are expected to continue to result in higher costs for labor, commodities, energy, and transportation, which may not be fully offset by productivity initiatives and price increases[227](index=227&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[228](index=228&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[229](index=229&type=chunk) [PART II—OTHER INFORMATION](index=55&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) This section provides additional information on legal proceedings, risk factors, equity sales, other disclosures, and exhibits [Item 1. Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to ordinary legal actions, which management believes will not materially affect financial results, though outcomes are uncertain - Management believes current legal proceedings are not expected to have a material effect on results of operations, financial condition, or cash flows[232](index=232&type=chunk) - The results of legal actions are uncertain, and actual losses could exceed accruals[232](index=232&type=chunk) [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the 2024 Annual Report, which could materially affect the business - No material changes to risk factors previously disclosed in the 2024 Annual Report[233](index=233&type=chunk) - Additional unknown or immaterial risks could also adversely affect the business[233](index=233&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details common stock repurchases during Q2 2025 under the company's ongoing share repurchase program Common Stock Repurchases (3 Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :-------------------- | :----------------------------- | :--------------------------- | | April 1 to April 30, 2025 | 383,300 | $412.72 | | May 1 to May 31, 2025 | 194,263 | $500.94 | | June 1 to June 30, 2025 | 136,073 | $529.27 | | **Total** | **713,636** | **N/A** | - As of December 31, 2024, the Board of Directors approved the repurchase of up to **78 million** shares, with **4,487,220** shares remaining available under the program as of June 30, 2025[237](index=237&type=chunk) [Item 5. Other Information](index=55&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025[236](index=236&type=chunk) [Item 6. Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including certifications and interactive data files - Exhibits include certifications from the Principal Executive Officer and Principal Financial Officer (31.1, 31.2, 32.1, 32.2)[238](index=238&type=chunk) - Corporate governance documents such as the Amended and Restated Certificate of Incorporation and By-Laws are incorporated by reference[238](index=238&type=chunk) - Interactive data files (iXBRL) for the financial statements are included as Exhibit 101 and 104[238](index=238&type=chunk)

Core Insights - IDEXX Laboratories, Inc. (IDXX) reported Q2 2025 earnings per share (EPS) of $3.63, reflecting a year-over-year increase of 48.8% and exceeding the Zacks Consensus Estimate by 9.67% [1][8] - The company's quarterly revenues reached $1.11 billion, marking a 10.6% year-over-year growth, driven primarily by the Companion Animal Group (CAG) Diagnostics [2][8] - Following the earnings announcement, IDXX shares experienced a 9.2% increase in pre-market trading [3] Revenue Performance - Q2 revenues increased by 10.6% year over year, with organic growth of 9%, surpassing the Zacks Consensus Estimate by 4.01% [2][8] - CAG Diagnostics' revenues grew by 10.9% on a reported basis and 9.7% organically, contributing significantly to overall revenue growth [4] - The Water segment's revenues rose by 9.1% year over year, while Livestock, Poultry, and Dairy (LPD) revenues increased by 4.8% [4][5] Margin and Profitability - Gross profit increased by 12.2% to $694.7 million, with a gross margin expansion of 92 basis points to 62.6% despite a 7.9% rise in the cost of revenues [6] - Operating profit surged by 541.4% year over year to $373.1 million, with the operating margin expanding by 734 basis points to 33.6% [6] Financial Position - At the end of Q2, IDEXX had cash and cash equivalents of $164.6 million, slightly up from $164 million at the end of Q1 [7] - Total debt decreased to $423.7 million from $449.8 million at the end of the previous quarter [9] 2025 Guidance - IDEXX raised its 2025 revenue outlook to a range of $4.205 billion to $4.280 billion, indicating a growth of 7.7%-9.7% on a reported basis [10] - The company also updated its full-year EPS guidance to a range of $12.40 to $12.76, projecting a growth of 16%-20% [11] Strategic Insights - The company's innovation-driven strategy has led to solid global growth, with record quarterly instrument placements and strong recurring revenues from CAG Diagnostics [12] - The Water segment showed robust organic growth across major regions, while LPD growth was supported by effective commercial execution [13]

Core Insights - Idexx Laboratories (IDXX) reported revenue of $1.11 billion for the quarter ended June 2025, marking a year-over-year increase of 10.6% and exceeding the Zacks Consensus Estimate of $1.07 billion by 4.01% [1] - The company's EPS for the same period was $3.63, up from $2.44 a year ago, representing a surprise of 9.67% compared to the consensus estimate of $3.31 [1] Financial Performance Metrics - Gross Profit - CAG: 62.8% versus the two-analyst average estimate of 62.6% [4] - Gross Profit - Other: 51.5% compared to the 29.6% average estimate based on two analysts [4] - Gross Profit - LPD: 47% versus the two-analyst average estimate of 51.7% [4] - Gross Profit - Water: 69.6% compared to the 69.6% average estimate based on two analysts [4] Revenue Breakdown - Revenue from Companion Animal Group in the United States was $684.5 million, exceeding the $663.1 million average estimate, reflecting an 8.9% year-over-year increase [4] - Revenue from Companion Animal Group International reached $337.95 million, surpassing the $312.95 million estimate, with a 15.1% year-over-year change [4] - Revenue from LPD International was $26 million, compared to the $25.76 million average estimate, representing a 3.2% year-over-year increase [4] - Revenue from Water International was $24.91 million, exceeding the $24.16 million estimate, with an 11.9% year-over-year change [4] - Total revenue from Companion Animal Group (CAG) was $1.02 billion, compared to the $978.21 million estimated, reflecting a 10.9% year-over-year increase [4] - Revenue from Other was $4.25 million, slightly below the $4.41 million estimate, with a 0.1% year-over-year change [4] - Revenue from Livestock and Poultry Diagnostics (LPD) was $31.76 million, compared to the $31.51 million average estimate, representing a 4.8% year-over-year increase [4] - Revenue from Water was $51 million, exceeding the $50.79 million estimate, with a 9.2% year-over-year change [4] Stock Performance - Idexx shares have returned -2.1% over the past month, while the Zacks S&P 500 composite has changed by +0.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - IDEXX reported a revenue increase of 11% as reported and 9% organically, with nearly 7.5% organic growth in Companion Animal Group (CAG) Diagnostic recurring revenues [5][6][8] - Operating profit grew by 14% on a comparable basis, with earnings per share (EPS) of $3.63, reflecting a 17% growth on a comparable basis [7][18] - The company increased its full-year revenue outlook by $90 million, projecting a range of $4.205 billion to $4.280 billion, indicating an overall reported revenue growth of 7.7% to 9.7% [7][20] Business Line Data and Key Metrics Changes - CAG revenue increased by 10%, with CAG Diagnostic recurring revenues growing nearly 7.5% organically, supported by a global average net price improvement of approximately 4% [9][10] - Water business revenues increased by 8% organically, while Livestock, Poultry, and Dairy revenues grew by 3% [16] - Global Reference Lab revenues increased by 5% organically, driven by solid volume growth [14] Market Data and Key Metrics Changes - U.S. clinical visits declined by 2.5% in the quarter, impacting CAG Diagnostic recurring revenue growth [10][12] - International regions saw double-digit growth in CAG Diagnostic recurring revenues, with strong performance attributed to IDEXX's execution and volume gains [9][29] - The company noted that U.S. CAG Diagnostic recurring revenues grew at a premium to U.S. clinical visits by approximately 800 basis points [11] Company Strategy and Development Direction - IDEXX is focused on expanding its commercial capabilities and investing in innovation to support its growing portfolio of diagnostic solutions [21][30] - The company plans to expand its commercial presence in three additional international markets and modestly enhance its U.S. commercial team [29][96] - IDEXX aims to leverage its innovative diagnostic products, such as IDEXX CancerDx and InVueDx, to capture long-term growth opportunities in the veterinary diagnostics market [30][35] Management's Comments on Operating Environment and Future Outlook - Management highlighted the resilience of the veterinary market and the ongoing demand for diagnostics despite macroeconomic pressures [41][42] - The company remains optimistic about the adoption of new innovations and expects to see continued growth in diagnostics utilization driven by pet owners' desire for high-quality care [26][27] - Management acknowledged the dynamic nature of the operating environment, including inflationary impacts and clinical visit trends, while expressing confidence in IDEXX's long-term growth potential [42][93] Other Important Information - Free cash flow was reported at $152 million for Q2, with a net income to free cash flow conversion rate of 80% [18] - The company repurchased $329 million of its shares during the second quarter, contributing to a 2.7% year-over-year reduction in diluted shares outstanding [19] Q&A Session Summary Question: Can you elaborate on the InVue uptake and the types of practices seeing traction? - Management noted excellent feedback on InVue, highlighting its workflow benefits and consistent, accurate results, with placements occurring in both independent and corporate practices [45][47][50] Question: What is the trend in consumables agreements and utilization? - Management indicated that consumables usage is tracking well, with independent practices moving quickly to adopt new instruments, while corporate practices tend to have longer lead times [53][55] Question: How are clinical visit trends reflected in guidance? - Management updated clinical visit trends to align with recent performance, expecting a continuation of the 2.5% decline observed [58][59] Question: What is the long-term trajectory for InVue? - Management maintained a long-term placement opportunity of approximately 20,000 for InVue, expressing confidence in the current year's placements [64][66] Question: Can you discuss the investments in the sales force? - Management confirmed investments in both U.S. and international markets to increase commercial density and support the growing portfolio of diagnostic solutions [95][96]

Financial Data and Key Metrics Changes - IDEXX reported a revenue increase of 11% as reported and 9% organically, with nearly 7.5% organic growth in Companion Animal Group (CAG) Diagnostic recurring revenues [4][6][9] - Operating profit grew by 14% on a comparable basis, with earnings per share (EPS) of $3.63, reflecting a 17% increase on a comparable basis [6][18] - The company increased its full-year revenue outlook by $90 million, projecting a range of $4.205 billion to $4.280 billion, indicating an overall reported revenue growth of 7.7% to 9.7% [6][19][20] Business Line Data and Key Metrics Changes - CAG revenue increased by 10%, with CAG Diagnostic recurring revenues growing nearly 7.5% organically, supported by a global average net price improvement of approximately 4% [9][10] - Water business revenues grew by 8% organically, while Livestock, Poultry, and Dairy revenues increased by 3% [15] - Global Reference Lab revenues increased by 5% organically, driven by solid volume growth [14] Market Data and Key Metrics Changes - U.S. clinical visits declined by 2.5% in Q2, reflecting macroeconomic pressures [10][12] - International regions showed double-digit growth in CAG Diagnostic recurring revenues, with a 62% increase in CAG Diagnostic instrument revenues [9][10][14] - The company noted that U.S. organic CAG Diagnostic recurring revenues grew 6% in Q2, supported by solid volume gains [10][12] Company Strategy and Development Direction - IDEXX is focused on expanding its commercial capabilities and investing in innovation to support its growing portfolio of diagnostic solutions [28][29] - The company plans to expand its commercial presence in three additional international markets and modestly enhance its U.S. commercial team [28][95] - IDEXX aims to leverage its innovative diagnostic products, such as CancerDx and InVueDx, to capture long-term growth opportunities in the veterinary diagnostics market [29][34] Management's Comments on Operating Environment and Future Outlook - Management highlighted the resilience of the veterinary market and the ongoing demand for diagnostics despite macroeconomic pressures [40][41] - The company remains optimistic about the adoption of new innovations and expects to see continued growth in diagnostics utilization driven by an aging pet population [25][41] - Management acknowledged the dynamic environment but expressed confidence in IDEXX's ability to navigate challenges and capitalize on growth opportunities [41][42] Other Important Information - Free cash flow was reported at $152 million for Q2, with a trailing twelve-month net income to free cash flow conversion rate of 80% [18] - The company repurchased $329 million of shares in Q2, contributing to a 2.7% year-over-year reduction in diluted shares outstanding [19] - IDEXX plans to host its annual Investor Day on August 14, 2025, to provide further insights into its strategy and performance [42] Q&A Session All Questions and Answers Question: Can you elaborate on the InVue uptake and the types of practices seeing the most traction? - Management noted excellent feedback on InVue, highlighting its workflow benefits and consistent, accurate results, with placements occurring in both existing IDEXX customers and new practices [46][50] Question: Can you discuss the contracts associated with InVue placements and the utilization trends? - Management indicated that consumables usage is tracking well, with independent practices moving quickly to adopt the technology, while corporate practices tend to have longer lead times [54][56] Question: What is reflected in the guidance regarding clinical visit trends? - Management updated clinical visit expectations to align with recent trends, anticipating a continued decline of about 2.5% for the remainder of the year [60][72] Question: How does the long-term launch trajectory of InVue compare to previous products? - Management remains optimistic about InVue's long-term potential, with a five-year placement opportunity of approximately 20,000 units [66] Question: Can you provide insights into the investments being made in the sales force? - Management confirmed that investments are aimed at increasing commercial density in international markets and enhancing U.S. account coverage to support a growing portfolio [95][98] Question: What early feedback has been received regarding CancerDx? - Management reported strong enthusiasm from veterinarians and pet owners, with initial usage primarily aiding diagnosis, and noted that competitive accounts are also adopting the test [100][102]