Idexx Laboratories ((IDXX)) has held its Q1 earnings call. Read on for the main highlights of the call.
The recent earnings call of IDEXX Laboratories reflected a generally positive sentiment, highlighting strong revenue growth, successful product launches, and significant international expansion. Despite these achievements, the company acknowledged challenges such as a decline in U.S. clinical visits and pressures from the macroeconomic and trade environment.
Solid Start to 2025
IDEXX Laboratories commenced 2025 on a strong note, achieving a 5% organic increase in overall revenues. This growth was primarily driven by a 4.5% rise in CAG Diagnostic recurring revenues, marking a robust start to the fiscal year.
Strong International Growth
The company reported an impressive 8.5% organic growth in international CAG diagnostic recurring revenue. This growth was fueled by effective net price realization and substantial volume gains, underscoring IDEXX’s successful international strategies.
EPS and Profit Growth
IDEXX delivered an EPS of $2.96 per share, reflecting a 5% growth as reported and a 7% growth on a comparable basis. This performance highlights the company’s ability to enhance profitability despite external challenges.
Expansion in Premium Instrument Install Base
The company achieved a 9% expansion in its premium instrument install base, placing 1,544 instruments in the U.S., which represents a 12% increase year-over-year. This expansion is indicative of IDEXX’s commitment to advancing its technological capabilities.
Launch of IDEXX Cancer Dx
IDEXX launched the IDEXX Cancer Dx for early detection of canine lymphoma, with over 1,000 practices ordering the test within a month. This launch is a testament to the company’s innovation in veterinary diagnostics.
Continued Innovation with IDEXX inVue Dx
The company reported strong pre-order momentum and a successful controlled launch of IDEXX inVue Dx, with over 900 placements by the end of April. This innovation is set to transition to a full launch, showcasing IDEXX’s dedication to continuous product development.
Strong Software Ecosystem Performance
Veterinary software and diagnostic imaging revenues saw a 9% increase, driven by recurring revenues and momentum in cloud-based software placements. This growth reflects the strength of IDEXX’s software ecosystem.
Resilient Pet Population
The estimated pet population remained stable in 2024, maintaining similar levels to the prior year and representing approximately a 3% CAGR versus the 2019 baseline. This resilience supports the demand for IDEXX’s products and services.
Decline in U.S. Clinical Visits
A 2.6% decline in U.S. clinical visits was noted, contributing to global same-store growth headwinds. This decline poses a challenge to IDEXX’s domestic market performance.
Decrease in CAG Instrument Revenues
CAG instrument revenues decreased by 5% organically, attributed to high prior year placement levels. This decrease highlights the challenges in maintaining growth in this segment.
Global Rapid Assay Revenue Decline
Global rapid assay revenues declined by 2% organically in Q1, due to a shift in pancreatic lipase testing to catalyst instrument platforms. This shift indicates a change in testing preferences impacting revenue.
Macroeconomic and Trade Environment Challenges
IDEXX continues to face challenges in the global trade environment and economic uncertainty, which have moderated growth. These external factors remain a concern for the company’s future performance.
Forward-Looking Guidance
IDEXX Laboratories’ CFO Andrew Emerson provided forward-looking guidance, reporting a 5% organic revenue growth driven by increases in CAG Diagnostic recurring revenues and veterinary software and diagnostic imaging. Despite a decline in U.S. clinical visits, the company achieved an EPS of $2.96, reflecting growth both as reported and on a comparable basis. IDEXX updated its 2025 outlook to include foreign exchange benefits and concluded litigation expenses, maintaining its full-year organic growth forecast at 6% to 9%.
In conclusion, IDEXX Laboratories’ earnings call highlighted a positive outlook with strong revenue growth and successful product launches, despite facing challenges such as a decline in U.S. clinical visits and macroeconomic pressures. The company’s strategic focus on international expansion and innovation continues to drive its performance, positioning IDEXX for sustained growth in the coming years.