IDEXX Stock Down Despite Q4 Earnings & Revenue Beat, Margins Rise

Core Insights - IDEXX Laboratories, Inc. (IDXX) reported Q4 2025 earnings per share (EPS) of $3.08, an 18% increase year over year, surpassing the Zacks Consensus Estimate by 5.17% [2] - Full-year 2025 earnings reached $13.08, a 22.6% rise from 2024, exceeding the Zacks Consensus Estimate by 1.2% [2] Revenue Performance - Quarterly revenues increased by 14% year over year to $1.09 billion, exceeding the Zacks Consensus Estimate by 1.86% [3] - The Companion Animal Group (CAG) grew by 15% as reported and 13% organically, while Water revenue grew by 12% as reported and 10% organically [3] - Full-year 2025 total revenues were $4.30 billion, a 10% improvement from 2024, driven by 9% reported and 8% organic growth in CAG Diagnostics recurring revenue, beating the Zacks Consensus Estimate by 0.5% [4] Segment Analysis - CAG revenues rose 14.7% year over year to $998.5 million [6] - Water segment revenues increased by 11.9% to $50.5 million [6] - Livestock, Poultry, and Dairy (LPD) revenues grew by 8.5% to $37.5 million [6] - Revenues from the Other segment decreased by 0.4% to $4.1 million [7] Margin and Expense Overview - Gross profit rose by 15.3% to $658.1 million, with gross margin expanding by 55 basis points to 60.4% despite a 12.7% rise in the cost of revenues [8] - Sales and marketing expenses increased by 11.3% to $167.1 million, while G&A expenses rose by 7.4% to $109 million, and R&D expenses jumped by 15.8% to $66.8 million [8] Financial Position - IDEXX ended Q4 with cash and cash equivalents of $180.1 million, down from $288.3 million at the end of 2024 [10] - Cumulative net cash from operating activities was $1.18 billion, compared to $929 million in the prior year [10] 2026 Guidance - IDEXX forecasts 2026 revenues between $4.63 billion and $4.72 billion, implying 7.6%-9.6% growth on a reported basis [11] - Full-year EPS is projected to be between $14.29 and $14.80, indicating growth of 9-13% [11] Strategic Outlook - The company highlighted a pivotal year in 2025 with the launch of IDEXX Cancer Dx for canine lymphoma and strong adoption of IDEXX inVue Dx, indicating a new phase of growth [13] - IDEXX enters 2026 with a robust innovation pipeline and strong momentum across its global business [13]