IDXX - Earnings call transcript Q4 2021 | IDEXX Laboratories, Inc.

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Operator

Good morning, and welcome to the IDEXX Laboratories Fourth Quarter 2021 Earnings Conference Call.

As a reminder, today's conference is being recorded. Participating in the call this morning are Jay Mazelsky, President and Chief Executive Officer, Brian McKeon, Chief Financial Officer, and John Ravis, Vice President Investor Relations. IDEXX would like to preface the discussion today with a caution regarding forward-looking statements. Listeners are reminded that our discussion during the call will include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today.

periodic risks in is this can our well our in these forward-looking under morning, idexx.com. be regarding Securities website Investor as noticed the Relations SEC statements press our visiting obtained information from and Commission, or available uncertainties the as and the Additional Exchange with by which the filings release of issued section

may period allow each the unless to as compared references XXXX, or Generally GAAP GAAP. most otherwise financial you call in reconciliation necessary. growth their measures We limit in participants Relations discussing growth, time not we comparable and Accepted also To noted. have your we'll refer please section additional call the questions. we our get free Brian to be with organic over Q&A to additional our Accounting accordance in may appreciate website. growth directly Investor like questions provided this non-GAAP our Principles During these the certain all one would the turn reviewing to permits, one I with A now In follow-up take and in participation queue the ask visiting results, equivalent of to broad earnings financial of to measures XXXX which questions, will prepared to Fourth growth, found be back release, Quarter by measures into is to McKeon. note so comparable that if feel please

Brian McKeon

for results of our year to everyone. quarter I'm through and our XXXX. and an XXXX pleased morning, provide Good overview fourth financial outlook you full take

reflected through healthcare comparable invest animal revenue delivered companion comparable for gains a with operating XX% we and EPS the in term end up to revenues. development digit towards instrument targeting gains outstanding growth annual point revenue diagnostics achieved major XXXX. IDEXX year-on-year delivered basis and Strong the the a growth was our of organic We're QX And the reached premium XX.X%, performance year to commercial comparable building We're on our higher XX% in IDEXX of organically share well-positioned financial XXXX. $X.XX basis. per revenues. organic instrument in at an long XX% $X.XX the full XX% accelerated year as reported revenue year XXX targeting Closer on growth above planned platforms organic by XX% increase in increased throughout driven and build consistent CAG trends for premium basis. growth growth on and across CAG enabled international financial XX% recurring innovation goals. compared we approximately We're diagnostic in XX%, by prior achieved as U.S. XX% Full in investments base. overall driven average strong year top in gains double recurring XX% of term goals revenue for to benefits operating revenue In on higher of strong basis, on full XX to capability. recurring the CAG with growth gains the year performance global up Revenue long as delivery full XX% basis revenues margins our results. our also and seen terms performance record expansion strong Two supported We across growth XX% CAG continue XX% advanced in improvement regions, in we XXX to on diagnostics points basis pandemic by strong XX% of of highlights, line very placements long supporting to organic year organic globally. growth comparable diagnostics our revenues. overall recurring EPS year, two organic margins gains term drove a our profit of XXXX financial outlook and a from a QX excellent a

Our reflects outlook XX% an growth, We'll per our growth to share, to EPS outlook tax or my international impact to including $X.XX in comments. XXXX $X.XX XX%, of per EPS related projected EPS higher X% share, $X.XX comparable discuss estimated financial rates. later

million fourth $X was Strong high quarter year and across fever in driven gains U.S. testing human reflected of Let's the levels Fourth in to revenues. testing begin compared by PCR revenue fourth decline of diagnostic XX% were prior to moderated and as recurring LPD growth of in year year-on-year quarter growth decline organic of COVID organic our as organic XX% benefited revenue in CAG growth overall growth XX% regions, international our reflecting XX% benefits gains review results that gains a by in business. the revenues, revenues recent water well China, by organic ezyVet QX software and supported in a results and comparisons organic revenues imaging from gains instrument ramping addition in CAG results. from XX% CAG Strong by in VetLab acquisition. also full to with a swine XXXX. diagnostic XX% were XX% veterinary growth IDEXX and These expected quarter XX.X% a African as

growth clinical QX clinical U.S. X.X% visits on nearly X% compared categories. gains QX, a recurring basis in non-wellness levels. revenue revenue level. regions. year clinical revenues are for increased year diagnostics CAG focus two trends year clinical reflecting recurring in the growth recurring from prior XX% was continued On supporting services which visit innovation demand XX% gains the demand two growth high revenues positive high the IDEXX and organic benefits quarter XXXX commercial organically overall year diagnostics by revenue the aided clinical gains major U.S. in IDEXX our diagnostic solid growth gains For an diagnostic increased CAG growth clinical Strong to year-on-year with levels X.X% and revenues in in XXXX basis on driven modalities veterinary fourth U.S. of practice of clinic same-store solid at was CAG services in in same-store at overall and including Expanding premium wellness Same-store growth full across supported high supported revenues, basis. CAG by to and across engagement quarter. U.S. clinical increased point An U.S. visit visits XX% growth healthcare XX% and a an and increased increase which diagnostic and average

same-store digit growth gains U.S. regions to including growth exceptional organic which did our the we In international XXXX. continue results. revenues resulting some practice testing recent in XXX solid moderation trends, wave the in digit program We've QX modest also of modalities QX gains strong cases continued reflecting year in organically the in on full lab on gains in impacts from benefits term volumes in We're terms which COVID across global demand strong level Globally, organic monitoring level indicative agreements. staffing. see in from testing January IDEXX dynamics IDEXX Omicron higher in driven growth year early don't including single of in visit some the trends. U.S. from by expansion of in underlying impact compared reference be strong and growth lab has high in double we seen QX regions major near achieved IDEXX changes levels. to growth as international clinical practice volume increased clinic XX% see prior these in Referenced

in achieved reflecting utilization, at testing across revenues global on full QX high reflects lab regions. year organically XXXX. the an gains customer increased XX% major international global supported by premium SediVue strong outstanding installed our increased VetLab in international with basis across XXXX placements instrument quality VetLab in placements economic and premium consumable breadth value hematology instrument platforms U.S. rollout catalyst global consistent X% The reflecting dynamics We double our ProCyte of momentum. continued on Strong gains and the XX% placement of of regions. IDEXX achieved revenues consumable supported prior regions. robust organic growth XX% from XX% organic IDEXX and placements supported For and growth and high this year global revenues U.S. instrument CAG expansion of reflecting and had in of retention of One. growth XX% strong another of metric. building gains gains year-on-year We premium U.S. XX% digit consumable across full up IDEXX QX base. levels, year levels, sustained increases These instrument in international our quarter across X,XXX

for gains high premium growth Rapid as instrument diagnostic continued move in revenue retention and continued XXXX we forward. and reflecting very high QX in XX% XX% testing foundation installed drove in New broader international the organically global instrument in our in regions. in growth base increases increased demand setting solid U.S. aligned with assay a for consumable continued strong customer a increase levels placements

XXXX canine, XDx, year assay Rapid the primarily for in full like was key XX% feline testing. recurring by specialty organic growth of CAG diagnostic moderate regions augmented gains volume and supported net the remains revenue high growth driven improvement price approximately revenue X% volume For by U.S.

net costs, XXXX the price service in X% X% improvement investment higher ezyVet business as ahead and reflect increases product quality revenues imaging of acquisition. QX including In to reported software in Looking for XX% XX% innovation. continued and our we're price to organically of reflecting in service planning our list range veterinary the CAG and from other areas diagnostic increased to and benefits higher

gains prior tough a strong high by and imaging comparable were software in degree growth related to and and to diagnostic year compares diagnostic recurring placements services Continued placements. imaging moderated PIMS strong

and diagnostic solutions. integration our as XX% and up organically as technology For XXXX insight million the to revenues XX% diagnostic and over continue veterinary, information year of expanded as feature of $XXX to key full a software reported imaging advance we

revenues COVID as QX track levels. by organic supported across in Business increased back testing non-compliance business solid towards gains business and organically to growth fourth last compliance this to in pre Turning flat year's growth was quarter growth water other categories. segments, continues XX% compared to

XXXX and XXXX. QX year a water of the organic QX organically X% dairy poultry XX% Livestock, to XX% organic levels XXXX. organically revenues in in full decreased growth For revenues compared decline XX% compared increased to in

As LPD offset lapping the our China prior fever testing, expected growth of year other including high African business for swine dynamics regions. global demand and in

of XXXX X% gains XXXX. in the challenging first We're For LPD to which into is declined in XXXX outlook. XX% our revenues half compared LPD for planning overall revenues and year-on-year factored compares the revenue organically full continued year

and and in P&L. gross continued at on growth profit increased in a operating gains. solid a as prior revenue aligned X% the growth, revenue profits impacts customer recurring gross moderated margins. continued diagnostic investments We increased business from net increase strong expanding instrument QX quarter, to and to or profit Sustained gains mix and revenue from by strategy. basis LPD Operating Operating benefited on Gross price in impacts were XX% software margins, growth XX% improvement, our factors by levels driven growth in plan growth, increased reflecting veterinary profit comparable CAG from high These positive overall moderate human reported with advanced including drove expenses revenues. PCR CAG solid a basis as revenue QX. high reported high and modest strong compared the comparable higher lower SaaS we base. Turning X%

QX. higher of relatively in as saw higher our enhanced capability a anticipate and XX in ezyVet aligned Operating in we and expense contraction We investments we basis growth with levels R&D, point relatively global in planned, drove sales growth advanced operating a rate CAG investments integrated our growth the comparable marketing operating expense XXXX acquisition. sustaining margins of global momentum. OpEx As strong

$X.XX year margins basis We're targeting levels approximately points on to XX% comparable reached pre-pandemic up term the invest business. basis on on tax the from high up our performance compensation a $X.XX activity. benefit to XXX as return, a XXXX in EPS in build For a basis XXXX per the was in comparable points and share, share year strong XXXX. per including operating XXX our based QX full growth related long for potential we share towards basis the

tax in share comparable points $X.XX year basis. XXXX a effective provided or basis EPS related per based tax results million For was Full included EPS the XX% XXX up on benefit year $X.XX which $XX compensation rate activity, benefits. of to share full

per Foreign loss share effects $X.XX revenue net a by impact approximately hedged reduced growth X% of a QX exchange in approximately profit $XXX,XXX. of resulting in

losses changes per hedge by foreign For net year foreign exchange share XXXX EPS million. exchange rate increased full of $X.XX of $X the

headwind with at $XX growth net $X.XX cash recent approximately approximately an of real XXXX million estate or impacts for the of we're of XXXX XXXX We in hedge XX% sheet. previously these strengthening rates ratios the the profits, in maintained revenue headwinds million capital a $XXX ended the leverage income impact of including mitigate FX credit for strong initial year-on-year borrowing five from in X.X was reflecting cash Free end dollar of estimated X.X% on outlook In U.S. We the press million revolving in first spending release. unfavorable noted our EPS planning established improved Given rates. net net the growth a facility FX $XXX million X.X gross our times a incorporates $XXX balance half. purchases. QX cash times provides flow X% with XXXX Well, relatively with and positions X.X% to will established the in we billion year $X which new year. in at

$XXX continue one allocated times current million interest repurchase our benefits, year. rates XXXX for financial diluted X.X% quarter. part expense reduction XXX,XXX net full repurchases which QX, for reflected of in shares plan X% leverage allocate shares outstanding a to a In to expectations We capital and incorporate is Our we ratio XXXX. projected the of to next as outlook in the approach forward in to interest share to these our year

range providing FX. billion. acquisitions approximately This revenue we X.X% to of X.X growth initial an outlook reflects a carryover reported of XX%, benefits outlook XXXX towards organic revenues are for of Turning and X.X% targeted from to XXXX from X.XXX XX% estimated growth headwind guidance billion revenue

growth sustaining higher and an this we growth strong to in with achieved a year-on-year range additional targeted CAG higher of organic moderately and XX% revenues. recurring diagnostic XX% exiting sector realization incorporates of Our for trends XXXX reflects global the aligns CAG net benefits for outlook growth price estimated range The end development. investments

focus benefits in instrument of our Our expansion offset in base business. pressure positive These half expectations businesses. water on LPD core and strategic revenues overall solid partially our and XXXX organic continued continued contraction premium projected by of on first are reflecting in overall the PCR also factors for factors growth growth revenues our outlook year-on-year human from in growth a testing installed our

full improvement gains is margin comparable our points in for operating to outlook a basis margin operating XX XX.X% targeted of building operating year recent reported XX.X% on annual Our XXXX strong reflecting to XXX margin years.

ensure business anticipated incorporated improvement impacts, margin relatively priority. we margin levels high global will capability as as by of higher supported gains a net in as operating We solid expect well operating be price commercial from our investments advanced operational gross in gains as continuity and cost our innovation We've benefits overall and outlook. inflationary margin

in spending profit we're margin rates and exit operating for gains our of improvements primarily dynamics, OpEx operating half be second the planning XXXX. comparison by in to Given year-on-year driven

an reported. outlook as Our for of $X.XX per X% increase $X.XX preliminary is share to to XX% XXXX EPS

We're points XXXX. effective projecting benefits outlook also from to based XX.X% basis of this EPS tax factors share changes. projected XX.X% -- impacts XXX Our relates XX% activity. compensation our tax tax from increase from effect overall rate it increase an in in estimated international tax in XXX to to to Approximately lower

benefits of reflects outlook tax approximately realized EPS compared $X.XX or XXXX based stock million or share. $XX XXXX high of $XX projected $X.XX tax to Our share million per per benefits compensation

on an we've a factors approximately impact is year of share hedge an XX% changes. Adjusting negative growth from noted, of $X.XX also of for comparable growth As for to EPS on $X.X from international XX% positions. per impact outlook including these FX, tax per incorporated estimated EPS net basis, year rate our estimated share X% establish

to growth. approximately ratio a revenues, for cash XX%. new to to spending million his That normalized is warehouse the cash capital to to major support now X% expansion million XX% free I aligned our our ratio of this high view. or net related for including our comments. aligned reflects was project, with This XXX cash site Adjusting income Jay free manufacturing $XX to a free XX% over of term our for financial XX% outlook flow to turn concludes net and flow conversion flow will call conversion targets. XXXX of Our income longer estimated

Jay Mazelsky

QX exceptional morning. And for strong an Thank a Brian. the in year you, sustained performance capping IDEXX good company.

supported full very operating the comparable solid recent delivered including in CAG fee. innovations global Both growth before expansion our morning revenue expanding are to plan our the XX% recap our These reflected areas highlight as year our We're advancement opportunity and results This on organic games which momentum to of outlook. an key For of businesses growth, by elements growth develop benefiting our expansion substantial margin this ROI strong the attractiveness business strategic trends market still new of reflect our is core EPS XX% XX% of we commercial and in from of long our forward capabilities. of portfolio. the I'll focus sustaining build innovation in in XXXX business commercial moving ongoing us. performance these including financial term well-positioned

Let me clinics demand sector driven brief services, begin trends on trends. ongoing healthcare a Overall by global companion veterinary healthcare strong for remain diagnostics. including at with robust animal update

in QX strong care information customers demand support pandemic. building and the XX% in nearly U.S. As expansion higher is supported same-store QX expand leading in clinical growth of globally, management same-store compared very increased we sustained provide to X% continues building Brian through clinic, the service desired a diagnostics XX% at QX CAG transfer in reflected to visits We're highlighted growth achieved growth our same-store on revenue gains Diagnostic step growth by this that organic IDEXX in platforms of XXXX levels. on mission. recurring clinical gains highly diagnostics XX%. X% U.S. pace strong seeing prior up clinical revenues as year

gains. includes X% in U.S. in confidence development clinical recurring investing building global in our on data surge diagnostics clinics clinical term per continue from visit customers accelerated demand XXXX the CAG XXXX face us to is the our for outlook near snapshot in long goals. diagnostics and management to solid of global productivity. approximately momentum the Omicron at end high towards sustained support and acceleration veterinary challenging this IDEXX global of in on moving our our revenue gives CAG higher variant. revenue sectors economy gains clinics that to sector the extremely clinic the and The that committed of XX% shared including demand reflected of highlighted of priority As earning focus forward. many solutions XXXX will and in XX% work clear be the customer term growth challenges a enhance our strong dynamic service in the remains of impacts staffing through through well-positioned service clinical It's levels Like high increased of

As our we we're demand look expanding aligned strong capability the forward, commercial with global trends.

Increasing customer Our wave completion Germany, we addition in contacts the to wave more IDEXX share to field and and team first of experienced also the country to that our of initiatives towards I'm tracking high as are touch management [core] and join that professional additional our off while executive three CAG, holistic currently increases and significant in countries of Korea our account and communicated customer involve in be early leadership commercial representatives the the as that XXX addition XXXX of to critical To priority will expansions professionals managers, augmenting maturing footprint elements footprints with veterinarians, pay with account of completion. of only commercial who our the continue tools These are in revenue France such marketing levels. investments continue and Asia-Pacific countries also in new excess quarter. key beyond nearing second service come. expanded extensive reach end, that half pleased in such job across will reference commercial service multiple as more of extension We're commercial each XXXX types South in to international field roots an of a expanded but philosophy. two enabled service approach include already and programs facing

placement our to of install are in each were continues as demonstrate quarterly placements achieved. XXXX a strong our growth across that innovations of increasingly with global largest for team international to over demand placements base of excess These commercial ProCyte XX% deliver across this. IDEXX ever by performance premium far growth in They comparable business day growth exceptional increased strong today, premium QX choosing well our delivered and our despite while expand, platforms. the commercial includes future we One is U.S. in in challenges. reflected support the results as regions, As execution clinical example instrument instrument investing fact Premium customers resulted needs. and great instrument XX%

goals attach it’s rates this into with benefits in add exceptionally ProCyte Our environment a see ProCyte clinics, demanding One innovative One's as easy like building to performance has Furthermore, exceeded veterinarians all provides clinic to of chemistry benefits IDEXX remains reliability highly mid growth their veterinary the launch customer modalities. the and also trend practice how ProCyte flexible, importance workup. analyzers XXX, positive well. but diagnostic One used in with launch or analyzer workflow. across which met this it way testing only full not from friendly has IDEXX a demonstrate use ProCyte XX% is One's customers done and fits the a feedback to We global for love and programs

gives [route] Our confidence future guided nearly global since XXXX over One in of and us now growth. QX growing of late instruments instruments revenue and CAG XXXX. A a is consumable recurring complete supports for regional globally usage, ranges launching premium installed have which range base ProCyte we of delivered robust

adoption. addition and In to driving placements

support preventive effort forward new process plans care in enrollments we XXXX. to staff. approximately sales provide U.S. and simplify commercial continues preventive practice in conversations while an preventive also deploying benefits continuing our preventive this engage in thorough broad drove quarter this customers clinics, on developing to enrollment our the educate The Despite the remains medicine. restricted and initiative care in from access primary broader for XXX we participation the vehicle team busy And agenda look professionals to with opportunity driving to for the clinic, to a to Our of customers.

we also clinic use PIMS intuitive We provides appreciate patient efficiency pet smoothly onboarding are products in workflow advanced focus the continued placements in by the of at support the well-positioned has opportunity tracking robust excellent products see the to customers on of that our growth improve ezyVet information customers to profit helping to gone to demonstrating levels were This cloud. cloud enable It diagnostics and our capabilities their our of a high software based expansion improve management in that significant and favorably customers to trend The quarter, care shift communication. providing easy momentum health and as ezyVet Customers flow. highest and provides. innovative puts expectations. the subscriptions are enabled owner very hands outcomes. of to and them XX%

portfolio technology solutions and software on communications. to owner deep are for IDEXX. pet Our appreciation use Veterinarians easy patient for internal They focus that and well strategic solutions as and area been these a productivity software built busier is have as to staff to contemporary need investment stacks. never of and have support a look and care,

PIM is business and strategy software broader with work set enterprise applications. customers to our clinical Our that of solutions bring a to seamlessly

of third a solutions portal PLUS veterinarians party supporting diagnostics diagnostic in was it support practices correlate results that our testing run is a launched for ordering our ago. VetConnect third integrated used from example their and great XX years diagnostics XX,XXX or together who is platforms. Our PLUS PIMs optimization workflow clinical almost with in to use Customers parties higher over globally. now own decision VetConnect software this. standpoint used It's growth practices in profiles being IDEXX and workflow

also industry quarter, which dose preference experienced low Web imaging premier Our PAC leading imaging our have demonstrating the business excellent customers for our software diagnostic an solution includes solutions.

in in of placements placement digit the and double growth quarter revenue. gains recurring XX% year-over-year supported Solid year full

We XX% revenue the our growth in year range strong of stream an part a installed also software rates QX and important profitable ecosystem. versus prior webpacks subscriptions PAC base growth have the in Web for continued utilization and and high with services retention of XX% had helped IDEXX increased become customer enterprise up

on satisfaction. which drive higher urine of invest successful a and innovations of IDEXX's Each recent of we the series commitment stage, launch In SediVue of to improved continually ensuring these product parameter Anaplasma in images. adoption veterinarians a customers standard include aid XDx platform the efficiency neuro innovations, making XDx which highlight decision decision addition and new with our sediment for of better with network performance updated treat thrilled types additional in on month. These BMX aids with XXX and helps trained performance the tests has that enhancements for focus to to patient Improving adoption is help testing higher an and our enhancements now and service a X.X to these been care. service greater offerings cancer customer several monitor expanded plus prevalent products particular and and of providing and central and product million rollout plus to for last oncology insights supporting to tests our addition identify, clinical strategy we're and were support also deliver

product an Some improved results to VetConnect steps of the reducing time and Notably, for XXXX. represents while saving room comps. [indiscernible] technologies test, for pet brings SDMA The first and the reducing XDx reagents onboard provides experience, XDx product addition of test capability our also separate coming due The improved storage. enhanced waste and to life XXXX demonstrates time the Plus the run to catalyst these owner test in fifth examples; communication approach extended PLUS number of easier our services allow mobile plus improve to app storage to finally reagent user temperature the space technology later will designs. update our the launched and in product and mobile the new removal the

plan element rapid already continued our While a our disease improved vector the on pet it's strong performance, on our invest our maintaining continuous growth upon saw key the manufacturing pleased end anticipate dynamics in represents we for year business support strong prioritized order impacts our to delivering testing, again achieving while these capability also going high expansion strong we improvement in outcomes. our future, with in In excited headwinds XXXX. we borne momentum in strong the levels. remain build focused footprint A our and to of focus is product business our high this chain supply Underpinning in test to these customers. build order through on outlook, while And frontline and margins. standard captured in to the in to in service to forward, Overall, providing health service times. service which across believe in execution capacity, gold XXXX and our support progress lab QX some consistent we've well supply high measures this and we availability about level inflationary chain execution positioned support customers we're we in plans are build to our turnaround in and very levels

pursuit high Before continued dynamic another highly for focused demanding purpose notch we and say whole morning, year. And engagement on team's on in in year We opening IDEXX our customers. have for service like a to of to for today's perform organization my and The our our top now share highlighted I'm customers’ time to employees as the our needs to thanks The work. end level I'd of of during our levels a remarks. be able open seen very the line and to results at both another this questions. is hard the concludes to remained some team. proud behalf results team's excellent perseverance That well as high as Q&A,

Operator

question Chris and Scott first and is from Instructions] [Operator JPMorgan. And you Thank answer question begin our now session. from the

Chris Scott

thanks get of magnitude little the to I just much more the a you're bit so term from the on for color Omicron want near questions. Great, to impact seeing results.

So much few more we years. out comps maybe on we've to just for we your more expectation And to basically bit as vet step so Thanks can question a seen growth start on you about it'd then think and down you are how annualizing in following seeing a visit over the of look kind visits elaborate normalized XXXX broader that much. past just be of little just that currently?

Jay Mazelsky

Good morning, Chris.

it. in appears growth. to ever to regions QX. primarily The testing forward quantified practices affects patients continuing tell as itself clinical some vet EMF they're trend in the modest forward it booking. is into terms visit see the this U.S. month the January as customer late just early in And off the drop We're impediments they impact ‘XX of haven't in in on manifested We volumes trying lab in is did thing Omicron, month, be of mind volumes. international been from We some us practices. busy get in seeing very demand two and that to What keep is strong. booking It underlying

with to position support seen to to vets also them manage with practices the in on technology, organization we the productive done be at And really our this. we're solutions service, able all cases good business. off field staffing couple a which In deal that they're We've They've point. issues temporary this be movie times them curbside and and have some drop more help a with in dealing So pickup. think that some a playbook this a that more there's of basis. and obviously

Brian McKeon

And helping teams faster our that. ongoing grow CAG our than outlook and to for XX% addition clinic to assumes by question to growth revenues growth XX% positive your visit to in strong IDEXX organic performance revenues recurring Chris performance, our

Chris Scott

or overall new growth. XXXX? be percent new contribution so thinking just placement how to one just adding I last to follow quick year, instrument And revenue up. about and I much. elaborate you talked instrument so Can you're may a its placements think Thanks on know, you about growth really about

Brian McKeon

the I'll priorities. on in of placements instrument we color that have our Jay momentum the to let talk

growth targeting we growth we terms have targeting and out, break IDEXX expansion of strong our see guidance. factored some we're what The XXX revenue continued it In from specifically lag we're that's outlook but may didn't solid the of like into as somewhat higher the overall markets, programs placement mix in instrument year-on-year growth growth. effects and growth placement the international

Jay Mazelsky

record remain investing We pretty across and best higher of to in board. that them and clearly placements momentum that Catalyst They standard in handle we us standpoint. the technology also XXXX the from solutions looking think in X,XXX back of QX them intact. CityView, and to will support are are care to capacity hematology saw just Practices a that patient on help record support over volumes. not staff enable of much And placements our productivity and but workflow the

Chris Scott

Okay. Thanks so much for the questions.

Operator

next Our Wright Erin Morgan is from question from Stanley.

Erin Wright

the Great, quantify the higher you dynamics of labor offsetting XXXX, thanks in we're some you and these your higher net? in factors, in from so the input just freight on are XXXX you margin price can a much. costs, In guidance? guide. perspective realization the net impacting based that inflationary How anticipate But environment

Brian McKeon

seeing our selectively we So in some are impacts business.

costs I highlighted been have factor. key distribution you the of a think freight and drivers, some but

are higher costs. monitoring We input labor

that will do components something effectively. impacts we'll be and anticipate need things use manage something our different of that's electronic to think nature. in And parts that of we have we but selective I we business,

continued business lot I our on continuity is making of think Erin have high very focus, sure a we reliability.

that. that's So and customer focus. our at and we're XX% primary really pleased with We're reliability

and do we that margin we're so have the mitigate for that have of expectation improvement we is enables out targeting to And a you some that us support degree higher solid a helps to relatively operating improvements impacts as to next reflective that margins net year. and and pointed

Erin Wright

then And Okay, philosophical of great. a here. question more

emerging growth of faster that you're term, that in Omicron here animal outlook? but structural term. some those the of a but health an pandemic trends near how nature? at me, are suggest that may be for diagnostics we about the with thinking from there be change how top your companion volatility, thinking may of be normalization Does comps underlying actually about give over bear Thanks. in pre-pandemic, more the rate And? you over them course longer while So five year And thinking this the pandemic changes and and broader picture, are about any barring you of does element animal bigger specifically more seem diagnostic and that it will sort just the

Jay Mazelsky

versus Yes, anything, practices, I'll result take if pandemic the that. and Good probably morning, adoptions Erin. pivot new the There within as is of a sales. type retail couple pet of that and quick longer a product service the more term were affected accelerated trends that

think of practices. of very diagnostics care focus result Clearly and as the that a obviously that. diagnostics margin, They and veterinarians recognized piece been pandemic. I accelerated patient a within on big medical center just as high their is profit have is services a very high

And includes use plays, role pet effectively both model then have combination so of to our factors. top And the been which of to tools more a as of commercial is the that, able on high being I continuing platforms owners which help management wanting the layer terms services you higher information activity think the veterinarians standards touch care, business wise. diagnostic important patients, innovate veterinarians and them patient in strategy company work a and medical with to our these in strategy, testing both and both of and

I continue strong trends that pre-pandemic. are think to higher we than see very

Erin Wright

great, Okay, thank you.

Operator

next is Ryskin from Michael from Our question BOA.

Michael Ryskin

of does this in terms opportunities around new new from about taking additional we've Great, initiatives the you've out opportunity? a of a including slightly of the is years? the of factor? and And some next done Could term Or and and of about solid highlighted question. you contributor quarter you others beyond things over do you already earlier in sort modalities, see the talk on overall? meaningful diagnostics? the I XXXX thinking that thanks and Or Jay year this How guide. of announced ask it about had in partnership point DX of this if that of what's terms different for products on things year BMX the partnership markets And past. long questions how beyond that the pet of is to untapped couple BMX of you some that additional than of playing on investors -- sort get market. congrats, the or the a to there's testing some want the at to oncology earlier you're And Brian more

Jay Mazelsky

is Sure. of cancer Pet prevalent Good in Mike. the death morning, dogs. cause most

the did and in treats, the high a It's So billion very veterinarian it's tools U.S., just of cases there about complete diagnostic you which that. set help X level positive take of to And look, are complex. terms of it's aren't support significant. cancer by dogs just of a and there I if that a process in fragmented very diagnosis the

veterinarians longer that very term market So attractive navigate help is and able to there treatment. cancer opportunity we think a diagnosis to be

solutions today really monitoring continuum the and identification care full then get is staging care. expertise value bring across cancer in to towards trying and we're the So building identification to more our off geared in pathology, cancer which treating and that of is which and really of chain

market bring we It's excited best technology to think in we We're partnerships the development. still So support process. terms early announced, that stages by it. class in of

more So what navigate less services. the of demand increasingly what's driven and revenue and it's think owner for about helping supporting opportunity I and pet them near types these veterinarians term complex about very is

the think attractive credible to those to capabilities by able over quite veterinarian be to off time expertise time. a We what learned we've I I bring, we're continuing it's and support opportunity. over think through excited technical this build and

Michael Ryskin

XX% and on guide question touched CAG the in And is revenue initial then you guide up relative to thanks. Great, on to a very again. solid expectations, The follow recurrent XX% about that commented moving positive. you price market you in clinical be growth there. to other visit of and you but the stated pieces the again, could some talk expect And you

CAG bridge frequency pieces help to are growth visit helpful. sort there? trying the Just be the us diagnostic whether what the bridge the get revenues that Just CAG at That'd of moving diagnostic it's clinical utilization? premium from to recurring could

Brian McKeon

Mike. Yes,

a XXXX about to that the big can demand the confident clearly, as So through we build I pandemic the that. and out we in we're as step had think off we of this think up coming were of that way

in calibrate had you that base. business CAG I the one we off at theme. of key rate our this, So as higher And QX growth exit that's look recurring think XX%, the DX

kind we investing will that potential that we growth about positive So highlighted. drivers international and see the benefit here. attraction in some the We're pricing with entering the year there And of and from net were we and good we have incremental some feel trajectory.

of one range momentum the kind I metrics really had earlier, and Jay is Erin's the inventor to the snapshot in per of kind about of we build the just reflects noted of in share that clinical end building pre-pandemic on average the we X%. XXX that our increases from higher the nearly to so in U.S. from levels of X% visit And points revenue think the off question clinics basis

ways And we there's support building that underlying confidence well, that those levels. to execute that were, positive going achieve we what projecting, range growth. service a It's So of I calibration well of our as more we And can here. is is that But invest type higher can think momentum pre-pandemic we think necessarily off the that's this not the potential really we back think I is towards can more end in type sustain you're in some of demand. I outlook execute trends seeing we're well. growth lower scenario the higher think that all if continue of but where and

our through. down And term just So will to it's some come Omicron think this I need of near or we'll manage execution. like dynamics that to things

term But about an the longer demand issue. business we're see feel and positive we don't underlying indicative we momentum of mentioned, investing or very towards that as Jay that. our on As a

think that got keep I progress. a we've strategy good to building on

Michael Ryskin

Great. Thanks so much. Appreciate it.

Operator

Stifel. from Jon is next from Block Our question

Jon Block

Hey, great. Thanks. morning. guys, Good

The First visits. third accelerated They two to year clinical average question wellness, levels. the is quarter well. XX do from very actually continue can on

at So practices, those. about management a capacity hear on to spots issues just love staffing vet we continue lot

do Jay and follow work a from consumers we're demand and what difficult I I've again, wellness way you got Thanks. industry as then through up. are an higher think be and impacted. accelerated the seeing think its But potentially from others just you underlying would how well. would is actually maybe Brian believe because they

Jay Mazelsky

there's there's a quite lot are emphasis on of have Yes. and into of owners I and wellness visits now think there's And kittens pet puppies lot driving in a of John, up to become pets being practice U.S. checked the for and some visits, their get dogs the who and time. terms an the couple things now that. of in a that who Obviously been cats. want and potentially wellness

in constraints what of a get it's demand are as off think time, see new. So the weeks. I underlying for get we wellness that'll month these pushed or not of relieved, under the but visits is some there and some you And I we they patient we I over others checkups, six think have Obviously sustain. there capacity as preventive and place, and very pointed emphasizing health. and the focused that an expect part to be market out, important in as robust care, to Certainly been able really and

Jon Block

earlier built second Okay, enough. one, the question. And on Chris's fair

So to bit more. I'll Brian, try push maybe you a little

think DX a and think view. of average was, a guide solid I recurring of implies I It lot CAG in around two people's year and XX.X%.

You helped in I cadence thought a expansion XXXX. margin the on OP of lot

a to with that got you for recurring call CAG XQ? call anything comp. DX your mean, comps tough I specifically You average to out wildly for the

year February. You that two when for Or full looking at of even it a all into mid persists. organic we CAG account? guys. it, we're Could that an average take maybe situation be this year? call single revenue versus digits that where in XX.X Thanks, headwinds DX frame Omicron phrase of just Jan, the that maybe

Brian McKeon

I about off think way this this building the Look, we're base. higher thinking is we're

And dynamics. into at we effectively metrics incremental boom in the now for most but some is near look off last had that building key hire of factor the clearly that pandemic would normalizing sustains and period XXXX moving we're the was off year we I there to So say QX higher just where needed that part a two there to base. term the calibrate year probably base, from sort of phase that here for the that think the in benefit we're some I puppy

of one. that the We're but momentum I is the XX%, so XX% think in number that that I overall business. And by to full we're year reflective think quarter, projecting not

work QX. dynamics the trends that through momentum near as And and really to think we we'll the through remain here, they seeing go in is out. sort term the in we'll effects U.S. these play and didn't then we we're the as early out term quarter, targeting underlying that we're what a but Omicron some significantly near strong think I see dynamic I dynamic

Jon Block

guys. thanks, right, All

Operator

Our from Nathan next question is Sachs. Goldman Rich from

Nathan Rich

Hi, good with morning. guidance. OpEx starting the maybe Thanks the questions. Brian, for

of sort levels XX% in of of was think terms the low rate of range continue run I what kind that maybe XXXX. about half the in in guess you see talk half the into being OpEx going you will are, of saw of the year the we kind in you levels? that you as forward come historical revenue to down higher both expect from relative Can and a the you getting back what ‘XX feel revenue. I this back to mentioned because latter it's like running for of current historical percent we're kind levels as lot see adding is forward a you of that here? Do has go to rate XXXX beyond

Brian McKeon

year. So more way I relatively controlled compares growth year-on-year QX the to comparable think working, think rate is some through about some XX% at we working still about OpEx the we're a prior Nathan had and levels to growth in

invest our we lean will where the and overall for kind with to future And I to growth. think, want expect relatively entering QX our compare. year, have back so same trending general full more should you of revenue expect OpEx dynamic us be of in line of growth in terms, towards that'll And, most be higher into kind in a rate challenging the that we

by solid I past in improvement. gross think margin as our the market be dynamics will, been they've supported

And closer grow so we've shared reasonable longer Day, expectation. longer think a Investor at term to is with OpEx outlooks consistent revenue think our I I term that growth

Nathan Rich

And the weighting kind of this how kind second any helpful. Brian, and half half, don't earnings should expect just the that's have I then, of commentary on like first between Okay, the if year the significantly you know we seasonality as to change see given quarter as commentary typical early that levels. Is going of in well kind the of business? that kind the trends the usually first the on of OpEx higher you

Brian McKeon

just would year-on-year in year, compares are It's but second reflective LPD. will more working as quarters half. more again And compare a be change in did seasonality, by of more mention an we be discussed, that's think that I driven the still in of in I one our terms to margin this challenging the through we'll thing highlight Yes. than dynamic. improvement specifically QX The is necessarily be but

decline the We'll revenues third be fever We through of the that quarter in in still compares. those swine have the really XXXX. African started working

as So dynamic that'll well. have a

Nathan Rich

great. Thanks lot. Okay, a

Operator

Ryan question Blair. Daniels next Our from William from is

Unidentified Analyst

wondering of in Hey you I I working But expenses? release for how most guys, until far longer of, no on your OpEx been ezyVet [indiscernible] that least through you're Ryan, guess kind with the in asked. integrate, integration question you those dealing you and my the mentioned, has you're fully along the still side. are way was at

Jay Mazelsky

Good continues terms and approach where part of quarter. we're the our strategy a things well, the integration PIMs along ezyVet the integrating lot numbers organizations growth were product morning. that and really behind to received marketplace and traction there's far XX% key that our in And well has in of sales Yes a and gone of from roadmaps. the cloud extremely that. It's based over this of placements placements quite our

good long traction well. integration going far really and So in

Unidentified Analyst

wellness visit follow strong panel are in With are if guess, color. have the like that rate proportion large I of of you historical seeing change the kind seeing a down a of Great, was are thanks. on And of was you quick guys up I any kind just maintaining proportion with kind with wellness growth? come that what included that the stack that kind wondering XX a you of growth, growth those

Brian McKeon

It's don't been mean, wellness. panel it's out. pretty mix. panels I for configured terms largely we Yes, something constant of These are break in

use customers of when get variation So that lot quarter-to-quarter. a

evolving who performance pandemic excellent long this I'd so for opportunity landscape have everybody day and to continued them through our unwavering the morning's our know the demonstrating thank for team, drives that, IDEXX excellent also grateful our Day thank and for out, call. purpose. I Very you while like And for and to delivered impacts. listening. purpose say like in passion our we purpose work. results some to employees navigating commitment with and the to our continued team are which joining would in term their I to aligned

And so we'll you. conclude that, call. Thank with the

Operator

gentlemen. and disconnect. and for Thank concludes now That participating ladies conference. you Thank you today's you may

IDEXX Laboratories (IDXX) 2 Feb 222021 Q4 Earnings call transcript