Core Insights - Baron Partners Fund achieved a significant return of 19.07% in Q4 2025, outperforming both the Russell Midcap Growth Index (-3.70%) and the Russell 3000 Index (2.40%) [1] - For the entire calendar year of 2025, the Fund returned 24.86%, again outperforming the Russell Midcap Growth Index (8.66%) and the Russell 3000 Index (17.15%) [1] - The Fund focuses on long-term investments in a non-diversified portfolio of well-managed growth businesses across various market caps [1] Company Highlights: IDEXX Laboratories, Inc. - IDEXX Laboratories, Inc. is a US-based healthcare company with a market capitalization of $51.73 billion, specializing in products for veterinary diagnostics and testing in various industries [2] - As of February 10, 2026, IDEXX's stock closed at $646.53 per share, with a 41.36% increase over the past twelve months, despite a recent decline of -9.00% in the past month [2] - The company has introduced new tests in 2025, with another expected in 2026, and has reported better-than-expected financial results, contributing positively to the Fund's performance [3] - IDEXX's competitive trends are viewed as outstanding, with expectations for proprietary innovations to drive future growth, supported by increasing trends in pet ownership and spending [3] - The stock appreciated 63.6% in 2025, indicating strong market performance [3]

Core Viewpoint - IDEXX Laboratories, Inc. reported higher fourth-quarter earnings compared to the previous year, but its shares fell by 5.63 percent despite the positive earnings report [1]. Financial Performance - The company posted net earnings of $248.19 billion, or $3.08 per share, which is an increase from $216.15 billion, or $2.62 per share, a year earlier, reflecting a significant growth in profitability [1]. - Quarterly revenue increased by 14.2 percent to $1.09 trillion, indicating strong sales performance [1]. Stock Performance - IDEXX shares opened at $651.54 after a previous close of $670.46 and traded between $625.00 and $658.75 on the Nasdaq [2]. - The trading volume reached approximately 0.42 million shares, compared to an average of 0.56 million shares [2]. - The stock has a 52-week range of $356.14 to $769.98, showing considerable volatility [2].

Financial Data and Key Metrics Changes - IDEXX reported a 14% increase in revenue for Q4 2025, with 12% organic growth, driven by a 10% organic growth in CAG Diagnostics' recurring revenues [4][5] - Full-year EPS reached $13.08, up 14% year-over-year on a comparable basis, with Q4 EPS at $3.08, reflecting a 17% increase [5][12] - Operating margins for the full year were 31.6%, an increase of 90 basis points on a comparable basis [5][11] Business Line Data and Key Metrics Changes - CAG Diagnostics' recurring revenue grew 10% organically in Q4, with 13% organic growth in CAG and 10% in water [6][10] - IDEXX VetLab consumable revenues increased 15% organically in Q4, supported by a 12% increase in the global premium instrument install base [8][10] - Rapid Assay revenues declined 3% on an organic basis in Q4, while Global Reference Lab revenues expanded 9% organically [9][10] Market Data and Key Metrics Changes - U.S. CAG Diagnostics' recurring revenues increased 9% organically in Q4, with approximately 4% net price improvement and 5% volume growth [6][10] - International organic CAG Diagnostics recurring revenue growth was 12% in Q4, reflecting strong demand and new business expansion [7][10] - U.S. same-store clinical visit declines were approximately 1.7% in Q4 and 1.9% for the full year 2025, with wellness visits down 3.6% in Q4 [7][10] Company Strategy and Development Direction - IDEXX aims to deliver solid organic revenue growth and profit gains in 2026, with initial revenue guidance of $4.632 billion to $4.72 billion, reflecting a 7.6%-9.6% increase [14][15] - The company plans to expand its premium instrument install base, targeting 5,500 inVue Dx instruments in 2026 [16][19] - IDEXX is focused on enhancing its commercial capabilities in key international markets to drive diagnostics adoption and utilization [25][26] Management's Comments on Operating Environment and Future Outlook - Management noted that the human-animal bond continues to deepen, with pet owners prioritizing high standards of care despite economic challenges [24][38] - The company anticipates continued pressure on clinical visits but sees potential for growth in diagnostics frequency and utilization [24][41] - Management expressed confidence in the company's strategy and the opportunities ahead, emphasizing the importance of innovation and customer partnerships [38][39] Other Important Information - Full-year free cash flow was $1.1 billion for 2025, representing 100% of net income, with capital spending of $125 million [13] - The company plans for a consistent year-to-year tax rate, excluding share-based compensation effects, and expects a foreign exchange benefit of approximately $0.22 year-over-year [18][19] Q&A Session Summary Question: Insights on vet visit dynamics and pricing - Management observed headwinds primarily in wellness visits, attributing it to macroeconomic pressures, while non-wellness visits showed growth [41][43] - There is a recognition among corporate practices of the need to moderate pricing to drive demand and patient traffic [43][44] Question: Drivers of consumables growth - The growth in consumables is driven by an expanding installed base of premium instruments and increased utilization through innovation [49][51] - Management highlighted the importance of quality placements and the integration of new technologies in driving consumables growth [50][52] Question: Reference lab market share gains - Management indicated strong global performance in reference lab growth, supported by investments in infrastructure and innovation [54][56] - The company is seeing increased customer focus on patient care, leading to higher competitive submissions [56] Question: Innovation contributions to revenue - Management noted that while direct contributions from innovations like Cancer Dx are modest, the overall impact on the portfolio is significant [58][62] - The potential for expanding the Cancer Dx panel is estimated at $1.1 billion over time, indicating a large market opportunity [63]

Core Viewpoint - IDEXX Laboratories, Inc. has announced the promotion of Michael (Mike) Erickson, PhD, to President and CEO effective May 12, 2026, as part of a planned succession process, with Jonathan (Jay) Mazelsky transitioning to Executive Chair of the Board [1][3] Group 1: Leadership Transition - Dr. Erickson has nearly two decades of leadership experience and has held senior positions at IDEXX since 2011, currently serving as Executive Vice President and General Manager of Global Point of Care Diagnostics and Telemedicine [2] - The Board's decision to appoint Dr. Erickson is based on a robust succession planning process, recognizing his deep understanding of the business and suitability to lead IDEXX forward [3] - Mr. Mazelsky will retire following the annual meeting of shareholders in May 2027 and will assist Dr. Erickson during the transition period [1][3] Group 2: Company Overview - IDEXX Laboratories is a global leader in pet healthcare innovation, providing diagnostic and software products that enhance veterinary medicine [4] - The company employs approximately 11,000 people and offers solutions in over 175 countries, contributing to the health and well-being of pets, people, and livestock [4]

Core Viewpoint - IDEXX Laboratories, Inc. is a global leader in veterinary diagnostics and animal-health technology, with a strong market position supported by a diversified product ecosystem and a high-margin, recurring-revenue model [1][2][3] Company Overview - IDEXX Laboratories, Inc. is headquartered in Westbrook, Maine, and operates in over 170 countries, providing diagnostic instruments, rapid tests, laboratory services, and software primarily for companion animals [1] - The company is classified as a large-cap stock, with a market capitalization of over $10 billion, reflecting its significant presence in the veterinary diagnostics market [2] Financial Performance - Shares of IDEXX have decreased 5.7% from their 52-week high of $769.98, but have increased 14.5% over the past three months, outperforming the Health Care Select Sector SPDR Fund's (XLV) 3.3% return [4] - Over the past 52 weeks, IDEXX stock has rallied 68%, significantly outpacing XLV's 10.6% decline, and is up 75.6% year-to-date compared to XLV's marginal return [5] - Following the Q3 results, IDEXX shares climbed 14.8%, with an EPS of $3.40 exceeding estimates and revenue of $1.11 billion surpassing expectations, driven by growth in the Companion Animal Group diagnostics segment [6]

Core Insights - The Baron Asset Fund underperformed for the second consecutive quarter, declining 4.23% in Q3 2025, while the Index gained 2.78% [3] - The underperformance was primarily due to the Fund's underexposure to Momentum, Beta, and Residual Volatility factors, which led the market higher [3] - The Fund's overexposure to Earnings Quality negatively impacted performance as lower quality stocks rallied during the quarter [3] Sector Performance - Stock selection in IT and Communication Services accounted for about three-quarters of the underperformance, with significant declines from Gartner, Inc. and StubHub Holdings, Inc. [4] - Weakness in Consumer Discretionary was broad-based, with notable declines from Choice Hotels International, Inc. and On Holding AG [5] - Financials were hindered by FactSet Research Systems Inc. and Morningstar, Inc., affected by industry-wide concerns regarding AI and a shift in investor focus [7] - Health Care showed solid stock selection, driven by strong performance from IDEXX Laboratories, Inc. [8] Key Contributors - IDEXX Laboratories, Inc. contributed 1.13% to returns, benefiting from improved foot traffic and revenue growth in its Companion Animal segment [9] - Amphenol Corporation gained 1.01% as expectations for data center spending rose, bolstered by a significant acquisition [10] - SpaceX reported substantial growth in its Starlink service and continued advancements in rocket technology [11][12] Key Detractors - Gartner, Inc. detracted 2.31% from performance due to disappointing earnings and decelerating contract value growth [13] - StubHub Holdings, Inc. faced challenges post-IPO, with investments impacting near-term results [16] - Verisk Analytics, Inc. was affected by a conservative outlook and concerns about the property and casualty insurance market [17]

Core Insights - Baron Asset Fund's third-quarter 2025 performance was impacted by a decline of 4.23% in Institutional Shares, while the Russell Midcap Growth Index and Russell 3000 Index returned 2.78% and 8.18% respectively, primarily driven by expectations of Federal Reserve interest rate cuts [1] Company Performance - IDEXX Laboratories, Inc. (NASDAQ:IDXX) reported a one-month return of 11.86% and a 62.01% increase in share value over the last 52 weeks, closing at $708.45 with a market capitalization of $56.571 billion on November 7, 2025 [2] - The company achieved a 13% revenue increase, with 12% organic growth in the third quarter of 2025, supported by improved foot traffic to veterinary clinics and a 10% constant currency revenue growth in its core Companion Animal segment, marking its best result in two years [4] Strategic Initiatives - IDEXX Laboratories installed 2,400 inVue Dx cellular analyzers, exceeding investor expectations and indicating a positive outlook for future consumable revenue streams [3] - The company is actively repurchasing shares, reflecting management's confidence in sustained favorable market dynamics and long-term growth potential in pet ownership and care spending [3]

Core Insights - IDEXX Laboratories Inc. shares increased by 13% in intra-day trading following strong third-quarter results that exceeded analyst expectations, driven by the adoption of advanced diagnostic technologies [1] - The company reported adjusted earnings of $3.22 per share, surpassing analyst forecasts of $3.14, with revenue rising 13% year-over-year to $1.1 billion, exceeding consensus estimates of $1.07 billion [1] - Organic revenue growth for the period was recorded at 12% [1] Revenue Breakdown - The Companion Animal Group (CAG) segment led growth with a 14% increase in revenue [2] - CAG Diagnostics recurring revenue advanced 11% as reported and 10% organically, fueled by strong demand for IDEXX VetLab consumables, which grew 18% on a reported basis [2] - The company placed over 1,700 IDEXX inVue Dx analyzers during the quarter, resulting in a 74% increase in CAG Diagnostics capital instrument revenues [2] - Operating margin expanded by 100 basis points to 32.1% [2] Future Guidance - Following the strong results, the company raised its full-year 2025 guidance, now expecting revenue between $4.27 billion and $4.3 billion, indicating growth of 9.6% to 10.3% [3] - EPS guidance was also increased to a range of $12.81 to $13.01, above the consensus estimate of $12.63 [3]

Core Viewpoint - Idexx Laboratories reported strong quarterly results, exceeding Wall Street forecasts, and raised its 2025 outlook, leading to a significant increase in its stock price [1][2]. Financial Performance - In Q3, Idexx's sales increased by 13% to $1.11 billion, surpassing the expected $1.07 billion [2]. - The company earned an adjusted $3.22 per share, exceeding projections of $3.12, with earnings growing by 15% [2]. Stock Performance - Idexx's stock surged over 16% to reach a record high of 725.82, breaking out of a flat base with a buy point at 688.12 [3]. Market Trends - The quarter saw a slight decline in total vet visits by 2.4%, but sales of pet products grew organically by 12%, and revenue from the livestock, poultry, and dairy unit increased by 14% [4]. - The U.S. companion animal business performed well, with international companion animal group (CAG) business growing at 15.5% organic constant currency, the fastest rate since the pandemic [5]. Product Development - Idexx is in a new product cycle with Cancer Dx and InVue Dx, which may help mitigate the impact of slow vet visits on its shares [6]. - The guidance hike reflects higher expectations for InVue Dx, a new cellular analyzer [4]. Analyst Insights - Analysts view the quarterly results as a strong indicator of Idexx's operational execution and potential for future growth [5]. - The ongoing demand for pet care, driven by the 2020 puppy boom and increased spending by younger generations, supports a bullish outlook for Idexx and similar companies [8].

Financial Data and Key Metrics Changes - IDEXX reported a revenue increase of 13% as reported and 12% organically, with CAG Diagnostics' recurring revenues growing over 10% organically [4][5] - Earnings per share (EPS) for Q3 was $3.40, reflecting a 15% growth on a comparable basis [5][12] - The company increased its full-year revenue outlook to a range of $4,270 million to $4,300 million, representing an overall reported revenue growth of 9.6% to 10.3% [5][14] Business Line Data and Key Metrics Changes - CAG Diagnostics' recurring revenue growth was negatively impacted by a 1.2% decline in U.S. same-store clinical visits [4][6] - IDEXX VetLab Consumables revenues increased 16% organically, supported by the expansion of the premium instrument install base [9] - Global Rapid Assay revenues declined 5% organically due to a shift in testing to the Catalyst platform [10] Market Data and Key Metrics Changes - U.S. organic CAG Diagnostics' recurring revenues grew 8% in Q3, while international CAG Diagnostics' recurring revenue grew 14% organically [6][8] - Water revenues increased 7% organically, with strong growth in international regions [11] - Livestock, poultry, and dairy revenues increased 14% organically, with double-digit gains across most regions [11] Company Strategy and Development Direction - IDEXX aims to expand its CancerDx franchise in 2026, adding mass cell tumor detection and another high-impact cancer biomarker [19][29] - The company is focused on enhancing its commercial footprint in international markets, with plans to expand in three countries by early 2026 [22] - IDEXX's strategy includes continuous investment in innovation and commercial capabilities to drive growth and improve customer engagement [20][42] Management's Comments on Operating Environment and Future Outlook - Management noted that diagnostics remains the fastest-growing revenue stream within veterinary clinics, driven by increased testing frequency and utilization [18] - The company expects to see continued growth in clinical visits as the pet population ages, particularly among dogs and cats [51] - Management highlighted the importance of maintaining high customer retention levels and the ongoing demand for IDEXX's innovative solutions [20] Other Important Information - Free cash flow for Q3 was $371 million, with a net income to free cash flow conversion rate of 94% [12] - The company allocated $242 million for share repurchases during Q3, contributing to a 2.7% year-over-year reduction in diluted shares outstanding [14] Q&A Session Summary Question: Strength of consumables in the quarter - Management indicated that growth in VetLab consumables is broad-based, driven by a large install base and high-quality placements [33] Question: MU consumables and new contracting terms - The growth in consumables is attributed to the high-quality placements and the introduction of new tests that veterinarians prefer to perform at the point of care [34] Question: MU placements and backlog of customers - Management confirmed that they are on track with MU placements and expect most customers to utilize multiple testing use cases [35] Question: End market visit trends - Management noted that non-wellness visits were closer to flat in Q3, with pressures on wellness visits continuing [38] Question: International CAG diagnostic recurring revenue growth - Management highlighted that international markets are still developing, with significant opportunities for growth as the sales organization matures [49]